LaSalle supplies furnishings for pre-fabricated houses built in the US. About 15 per cent of all new houses built in America are made in bits and sold to homeowners for self-construction.
The acquisition will replace some of the turnover that Heywood lost with the Pilkington disposal. Total sales in 1992 were pounds 389m, which would have fallen to pounds 230m. A full- year contribution from LaSalle will add dollars 140m ( pounds 91m) to Heywood's annual sales.
LaSalle made operating profits of dollars 6.4m in 1992, against dollars 3.3m the previous year. The purchase price represents a multiple to pre-tax profits of 10.1 times. Exit multiples are usually worked out using profits after interest and tax, but Heywood would not publish the figures making that calculation possible.
Heywood had built cash deposits of pounds 65m after the Pilkington deal, and still has pounds 30m following the LaSalle purchase. It sold the distributor because it views the supply of glass as a commodity-style business, with little room for improving profit margins.
LaSalle has 30 branches across the US and is one of three suppliers to the self-build, pre-manufactured housing market. Some 210,000 houses of this sort were bought in 1992, worth about dollars 5.7bn. Heywood stressed yesterday that the product LaSalle sells is for good-quality accommodation.
Heywood said LaSalle's trading profit for the first four months of 1993 was dollars 2.5m, nearly twice the profits earned in the first third of 1992.
Heywood shares rose 6p to 291p on the news yesterday.Reuse content