Stealth Group tackles Bunnings and Metcash with $22m deal for Hardware & Building Traders

The all-cash deal, which settles today, delivers critical mass to the Stealth business which the company says provides a “market-leading alternative” to hardware and industrial giants Wesfarmers (ASX: WES), which owns the Bunnings and Blackwoods businesses, and wholesale supplier Metcash (ASX: MTS).

It has also led Stealth Group to significantly upgrade its FY28 earnings upgrade, a move that led to a surge of more than 65 per cent in the company's share price today to a high of $1.15.

The Perth-based Stealth says the transaction is a “once-in-a-generation opportunity” that creates Australia’s largest integrated distribution network, spanning the hardware, industrial, safety, automotive and workplace sectors.

The move will combine Stealth’s company-owned operations, which include C&L Tool Centre and Heatleys Safety, Industrial & Automotive, with a national network of independent and largely family-owned retail and trade operators that form HBT’s existing licensed membership base.

“This acquisition and merger of HBT marks a pivotal moment for Stealth and for Australia’s independent hardware and industrial sector. It is transformational in scale, strategic in timing, and value-creating for our shareholders, independent operators, our team, and suppliers who see the benefit of partnering with a large alternative group,” says Stealth group CEO Mike Arnold.

“Our objective is to make independent operators and our 100 per cent-owned company operations more successful and highly competitive for customers, while providing a strong channel to market for suppliers who support the alternative-independent strategy and prefer not to be beholden to one or two major players.

“The integration of HBT materially expands our national footprint and strengthens our position as the market-leading alternative to the majors.”

Stealth says the acquisition is a “compelling strategic opportunity” that offers benefits to HBT members, suppliers, customers and shareholders.

“Combined, we now operate across more than 1,200 hardware and industrial locations – a uniquely capital-light, lean, and flexible cost base with a scalable distribution model that few in the market can match,” says Arnold.

“This transaction positions Stealth to accelerate growth, improve margins, and deliver stronger, more predictable cash flows.

“Our wholesale and direct-to-customer model, supported by our exclusive-brand strategy, can now be deployed at scale, translating into higher earnings and long-term shareholder value.

“This is an exciting next chapter for Stealth, unlocking new opportunities for independent operators, suppliers, and shareholders alike.”

The merged entity will comprise a national wholesale and buying-group platform representing more than $800 million in annual purchases that reflect about $1.3 billion in retail sales.

Stealth says this positions the group as the top market-leading alternative to the major industry players within a $93 billion market that remains highly fragmented.

The acquisition is expected to drive growth, improve margins and deliver stronger free cash flows for Stealth through wholesale distribution (B2B), direct-to-business (B2B) and direct-to-customer (B2C) channels.

As a result, Stealth has upgraded its business targets over the next three years to an increase in sales revenue of more than $500 million by FY28, up from a $300 million targeted increase previously.

EBITDA is expected to increase between 8 and 12 per cent, up from the 8 per cent previously forecast.

Stealth posted record sales of $145.1 million, up 27.6 per cent, in FY25 with the result boosted by the full-year contribution from Force Technology, a mobile accessory distributor acquired for $9.5 million last year. EBITDA for the period surged 62 per cent to $9.9 million.

Stealth Group shares closed at $1.11, up 60 per cent for the day.