Grafton Group has conditionally agreed to acquire Polvo, a Dutch company, for €131 million (£113 million).

Polvo specialises in ironmongery, tools and ventilation systems. It trades from 51 branches and reported revenue of €127.3 million last year (£109 million).

Grafton is the parent company of brands including as Selco, Buildbase and Plumbase. This acquisition increases its presence in the Southern, Western and Eastern regions of the Netherlands, where it already owns the Isero tools store business. The combined businesses will have revenues in excess of €300 million and will trade from 113 branches.

The transaction is expected to be completed before the end of June 2019. The announcement caused Grafton’s shares to rise 6.1% to their highest since the economic downturn in 2007.

Gavin Slark, CEO of Grafton, (pictured) said: "This acquisition will complement our existing Isero business, increase our exposure to the attractive, fast growing Dutch market and support our strategy of creating a more balanced portfolio of businesses internationally.

“Polvo is a long-established high quality business and brand that gives Grafton a unique opportunity to materially increase its scale and consolidate its market leadership position in The Netherlands."