Stealth Group Holdings has acquired Hardware & Building Traders for $22 million, creating Australia’s largest integrated hardware and industrial distribution platform and upgrading its FY28 financial outlook.
- Acquisition of HBT expands Stealth’s network to over 1,200 stores
- Deal valued at $22 million, funded through existing bank debt
- Upgraded FY28 guidance, sales > $500 million, EBITDA margin 8–12%
- Expected $8 million annual profit synergies by FY27
- Positions Stealth as leading alternative to Wesfarmers and Metcash
A Transformational Acquisition
Stealth Group Holdings Ltd (ASX – SGI) has taken a decisive step to reshape Australia’s hardware and industrial distribution landscape with its acquisition of Hardware & Building Traders Pty Ltd (HBT). The $22 million all-cash deal, completed on 10 November 2025, significantly expands Stealth’s footprint, adding approximately 1,165 independent retailers and boosting annual purchase volumes by around $700 million.
This acquisition is more than just a bolt-on; it’s a strategic leap that positions Stealth as the market-leading alternative to dominant players like Wesfarmers and Metcash. By integrating HBT’s extensive network of family-owned retail and trade operators, Stealth now commands a national platform unmatched in scale and scope across hardware, industrial, safety, automotive, and workplace sectors.
Scale, Synergies, and Earnings Power
Stealth’s management highlights the deal’s immediate accretive impact and strong cash generation potential. The company anticipates $8 million in annual profit synergies by FY27, driven by procurement consolidation, distribution efficiencies, and expanded exclusive-brand offerings. These synergies underpin an upgraded FY28 guidance, with sales now expected to exceed $500 million, EBITDA margins rising to between 8% and 12%, and net profit margins improving to 5%–8%.
Crucially, the acquisition leverages Stealth’s capital-light, scalable business model, combining wholesale, buying group, and retail operations without the heavy fixed costs typical of larger competitors. This hybrid approach enhances flexibility and operational efficiency, allowing Stealth to capitalize on growth opportunities in a fragmented $93 billion market.
Integration and Growth Outlook
The integration plan aims for completion within 60 days, preserving HBT’s core foundations while expanding product ranges, digital infrastructure, and customer engagement channels. Stealth’s strategy includes consolidating existing buying groups under HBT, expanding the H Hardware & Industrial banner, and rolling out loyalty and subscription programs to deepen customer relationships.
Looking ahead, Stealth’s diversified multi-channel distribution model is well positioned to withstand market cycles and capture growth across business-to-business and business-to-consumer segments. The company’s focus on exclusive brands, tool hire services, and online channels further strengthens its competitive moat.
Market Implications
This acquisition accelerates Stealth’s trajectory toward market leadership, effectively leapfrogging its growth timeline by nearly three years. It challenges the duopoly of Wesfarmers and Metcash by offering independent retailers and suppliers a compelling alternative with enhanced scale, buying power, and service capabilities.
For investors, the deal signals a robust growth story supported by disciplined capital management and a clear path to margin expansion. However, the success of this transformational move hinges on seamless integration and the realization of projected synergies amid competitive pressures.
Bottom Line?
Stealth’s acquisition of HBT marks a pivotal moment, setting the stage for accelerated growth and intensified competition in Australia’s hardware distribution sector.
Questions in the middle?
- How quickly will Stealth realize the targeted $8 million in annual profit synergies?
- What competitive responses might emerge from Wesfarmers and Metcash?
- How will Stealth balance integration risks with aggressive expansion plans?