Photo: supplied
Fletcher Building has made a deal to sell its Australian plumbing supplies and distribution business for A$170 million (NZ$186.3m).
The construction company announced a decision to sell Tradelink in February following a comprehensive strategic review that concluded the business did not fit with its long-term strategic focus.
Australia's trade distribution business Metal Manufactures will buy all the shares in Tradelink with A$160m cash on the 30 September settlement date.
The remaining A$10m cash payment will be deferred based on meeting separation milestones over the next two years ending by September 2026, which could cost Fletcher about A$20m in costs.
Fletcher Building acting chief executive Nick Traber said: "We are pleased to have signed the Tradelink sale agreement in line with our target timing, and to have achieved an attractive outcome for both parties."
Fletcher's net proceeds will be subject to transaction costs of about A$10m.
It will also record a non-cash impairment of the Tradelink business of about A$32.5m in its 2024 financial report, as well as another NZ$54m non-cash loss in translated foreign currency reserve.
"The sale will enable us to concentrate our efforts on the performance and growth of Fletcher Building's core businesses," Traber said, adding company would use the sale proceeds to pay down debt.
Fletcher will release its FY24 annual results on 21 August.