Howden Joinery Group Plc may be a takeover target for Travis Perkins Plc, Britain’s largest builders’ merchant, Evolution Securities Ltd. analysts led by Graham Brown said.
Travis Perkins’s ratio of net debt to earnings before interest, taxation, depreciation and amortization is forecast to fall to 1.1 in the 2012 fiscal year from 1.6 times, the analysts said in the note earlier this month. That will give the Northampton, England-based company, owner of the Wickes home-improvement chain, more capacity to buy others, the analysts said. Travis Perkins’s management said it is “keen to undertake further deals,” they added.
“Howden Joinery must be on the wish list, and such a transaction would strategically work well, in our view, possibly with Howden Joinery branches being located within Travis Perkins yards,” Evolution said. “Both companies are U.K.-focused," and London-based Howden’s main business is kitchen products, while Travis has a "nascent position" in that market.