A toolshop acquisition has made Stealth Global today’s biggest ASX winner
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Shares in industrial distribution company Stealth Global (ASX:SGI) have spiked as high as 92 per cent after the company unveiled an acquisition.
Perth-based Stealth Global is a global supplier of industrial equipment such as adhesives, welding equipment and safety wear. Its portfolio of brands includes BSA Brands and Heatleys Safety & Industrial.
Today it told shareholders it is buying Brisbane based tool supplier C&L for $3.8 million.
C&L has been in business since 1969 and predominantly sells to business consumers – increasingly online. In FY20 it made $14.3 million in revenue and $1.26 million in earnings.
It has seen strong trading momentum thus far in FY21 with sales trading 25 per cent up from FY20.
Stealth Global managing director Mike Arnold said the deal, which will settle in the coming days, was carefully considered and will pay off.
“The acquisition of C&L continues Stealth’s disciplines growth plan since listing on the ASX where we have strategically expanded our product offering, our distribution capability and network and have moved into new geographic markets,” Arnold said.
“We have strict criteria on price and on delivering long term value to our shareholders and customers and we believe C&L meets these requirements.”
“The depth of C&L’s wide ranging products and tailored services will give the merged businesses greater scale as we continue to build a national network.”
Stealth first listed on the ASX in late 2018 at 20 cents per share. Shares have been below that mark for most of its listed life but took off this morning.
The surge was enough to make it the ASX’s biggest winner as at 11am (AEDT).