Heywood buy means tougher competition
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Your support makes all the difference.COMPETITION in the British pounds 300m windscreen replacement business is set to intensify after Heywood Williams paid pounds 10.6m for one of its largest rivals.
The purchase, being funded by pounds 4.4m cash and the issue of 1.8 million shares, brings Heywood's slice of the UK market to about 27 per cent. Autoglass has 40 per cent, and so about two-thirds of the windscreen replacement business is now controlled by two players.
Ralph Hinchliffe, Heywood's chairman, said he hoped it would not mean a price war. But he noted that windscreen prices had fallen steadily over the past three years as competition increased.
The company has bought the 53- branch Bridgewater Speedy Auto Glass and Trans Britannia Glass, which has two wholesale depots, from TCG of Canada. The new companies have about 7 per cent of the market and are concentrated in South-east England, where Heywood had few outlets. They made profits of pounds 599,000 for the seven months to 31 July and were expected to make pounds 1.5m for the year.
They will be merged with Autowindscreens, Heywood's existing replacement business. Mr Hinchliffe said: 'TCG had made a lot of investment in the businesses without getting much out of them. We know we can do better.'
Heywood has about pounds 15m cash at the bank and generous borrowing facilities to fund further acquisitions, but Mr Hinchliffe said nothing was imminent.
Last March Heywood sold the bulk of its glass division for pounds 95m and paid pounds 42m for LaSalle-Deitch, a supplier of building products and furnishings. Heywood shares were up 2p to 343p.
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