Homebase sold to Australians in £340M deal

The deal comes on the same day its primary Australian competitor revealed plans to exit hardware retailing.

Bloomberg reports that the acquisition from Home Retail Group Plc will give Wesfarmers, which runs the Bunnings branded home-improvement business, 265 U.K. stores that had revenue of 1.46 billion pounds for the 12 months ended Aug. 29, the Perth, Western Australia-based company said in a statement to the stock exchange.

“Bunnings is well placed to unlock value from the Homebase business and has a proven track record in delivering growth both organically and through acquisition,” Wesfarmers Managing Director Richard Goyder said in the statement.

The purchase, expected to be completed in the first quarter of 2016, will have an “immaterial effect” on Wesfarmers’ earnings per share and return on equity initially, and add to profits from the third year following the acquisition, the company said.

The deal is the first step in the entry into the U.K. and Ireland with a 500 million pound investment planned to expand Bunnings there over three to five years, Wesfarmers said. The purchase will be funded through British pound-denominated debt facilities, it announced.