Mark Goddard-Watts, founder and chief executive of Toolstation – which specialises in tools and building materials, said: “We had planned to find a strategic partner at this stage of our development to support and continue our growth and we believe Travis Perkins’ culture and ambition perfectly suits our plans.
'With Travis Perkins’ support, we look forward to continuing to deliver great value products to an increasing number of customers across the UK.”
At the moment Toolstation employs 244 people with a main distribution warehouse and trade counter in Bridgwater, Somerset, and ten more trade counters across the UK. It wants to have at least 80 by 2013.
Toolstation has assets of £12m with turnover in the last 12 months of £21.4million. For the year ended 31 July 2007 it reported a pre tax loss of £0.3m.
Travis Perkins has paid £5m for its 30 per cent stake and will provide a £7m loan for Toolstation to pay off its existing debts plus a £30m loan facility to support Toolstation’s planned business growth – subject to performance conditions.
A spokesman for Travis Perkins refused to say exactly how soon it expected Toolstation to contribute to profits, but it has the right to acquire the remaining 70 per cent of shares after four years.
A company statement said: “It is expected that over the next six years cash generated from trading will repay all drawings under the £30m loan facility and will create a positive cash balance by the end of this period.”
Toolstation was established in 2003 by Mr Goddard-Watts alongside a number of former executives from Screwfix. It sells a wide range of products including plumbing and heating materials online, via its UK based call centre and through its trade counter network. It specialises in high product availability and next day delivery.
Travis Perkins said it was particularly attracted to its ecommerce, warehousing and IT model.
Geoff Cooper, chief executive (pictured), said: “This investment represents a significant advance in the development of our multi channel strategy. Our customers increasingly expect products from us through a variety of distribution channels, delivered to them or collected by them via a time, place and mechanism that suit their needs.”