Metcash to raise $300m after string of acquisitions

The news: Metcash has extended its trading halt for a $300 million equity raising after announcing the acquisition of food service distributor Superior Food Group and two hardware suppliers.

The numbers: Metcash will acquire Superior Food for $412.3 million, industrial supplies business Bianco Construction Supplies for $82.2 million and frame and truss operator Alpine Truss for $64 million. The company will fund the acquisitions through $278 million of its cash and debt facilities and raise another $300 million through an institutional placement and retail share purchase plan, with shares to be offered at $3.35 each, an 8% discount to its last trading price.

The context: Metcash, which supplies the IGA supermarkets network as well as other independent retailers, will buy Superior Food from private equity firm Quadrant. It said the deal would strengthen the company’s existing food business and deliver immediate scale in foodservice, which is an attractive and adjacent growth market. The two hardware acquisitions support the expansion strategies of its Independent Hardware Group business that also operates the Mitre 10 chain. The deals are expected to be completed by the first quarter of fiscal 2025 and would all be earnings accretive, it said.