Grafton Group Acquires Spanish HVAC Distributor Mercaluz

Grafton Group plc is expanding its Iberian footprint with a significant acquisition, agreeing to purchase Spanish air conditioning equipment distributor Mercaluz for a potential 175 million euros. This strategic move bolsters Grafton's presence in the construction products distribution sector, particularly within the rapidly growing HVAC market in Spain.

The transaction, valued at approximately 165 million euros on a debt and cash-free basis, will integrate several Mercaluz entities, including Componentes Electricos Mercaluz, S.A., Mercaluz Hogar, S.L.U., EAS Electric Smart Technology, S.L.U., and Mercaluz Canarias, S.L.U. Founded in 1986 and based in Alicante, Mercaluz has established itself as a key supplier to professional SME installers, serving around 10,500 clients through 18 locations and a workforce of over 330 employees.

Mercaluz's financial performance in the year ending 2025 showed unaudited revenues of 150.4 million euros and adjusted operating profit of 22.2 million euros. A notable aspect of its business is the strong reliance on own brands, with nearly 75% of its sales derived from these, prominently featuring the Johnson brand for which Mercaluz holds European distribution rights. This focus on proprietary brands offers a distinct advantage in a competitive market.

This acquisition follows Grafton's recent purchase of Salvador Escoda in October 2024, another Spanish distributor. The combination of Mercaluz and Salvador Escoda is projected to generate combined annualized sales approaching 400 million euros. This dual acquisition strategy allows Grafton to leverage purchasing synergies and enhance its service offering in the fragmented Iberian market. The Spanish construction sector is anticipated to see growth of 3-4% in 2026, with HVAC solutions identified as a particularly dynamic segment.

Eric Born, CEO of Grafton Group, expressed enthusiasm for integrating Mercaluz, describing it as a "scalable family business" possessing the desired attributes for acquisition. The integration is expected to be earnings-enhancing within the first full financial year and deliver robust returns on invested capital over the medium term. Mercaluz will continue to operate independently, maintaining its direct-to-site delivery model and regional hub structure, managing an extensive portfolio of approximately 9,000 SKUs.

The deal is contingent upon regulatory approval from the Spanish National Commission for Markets and Competition. The strategic rationale behind this acquisition centers on consolidating Grafton's position in the European distribution of construction products, capitalizing on the strong performance and growth potential of the HVAC sector in Spain.