Howdens Joinery Group has agreed to acquire the parent company of Ultima Furniture Systems, which trades as DIY Kitchens, for an enterprise value of £390m.
DIY Kitchens is a vertically integrated kitchen business that sells its products exclusively online, principally to end-customers, particularly those looking to self-manage the purchase of their kitchen. It is "a highly profitable and growing enterprise with a proven business model quite distinct from Howdens’ own trade-only, full-service model, through which the group will be able to access, directly, ‘non-trade’ consumers, thereby expanding its addressable customer base in the UK".
DIY Kitchens’ online channel provides consumers with self-service planning, design and ordering tools, and its model combines low selling overheads with MTO manufacturing and strong cash generation supported by customer prepayment.
Post completion, DIY Kitchens will remain an online-only business focused on non-trade customers, and will be operated separately from Howdens’ own much larger trade-only business. Completion of the transaction remains subject to customary regulatory approvals.
Andrew Livingston, CEO of Howdens, says: “Howdens’ highly successful trade-only model is built around supporting solely trade customers with outstanding in-stock availability, expert local depot teams, and an end-to-end service from design through to delivery.
"The acquisition of DIY Kitchens, which will be operated on a standalone basis, adds a complementary very profitable, business to the group, providing access to non-trade end-customers through its direct online channel with self-service planning, design and ordering tools.
“DIY Kitchens shares many of the characteristics that underpin Howdens’ success including well-invested manufacturing, strong vertical integration, scalable capabilities and a deep, well-embedded entrepreneurial culture. We are excited to welcome the DIY Kitchens team to Howdens. We have great respect for the innovative business model they have built, and we look forward to supporting the business’ continued growth and investing behind its next phase of development.”
