News & Media

AT A GLANCE (KEY HIGHLIGHTS)

The acquisition delivers immediate and long-term value for all stakeholders.

• Transformational Acquisition – Clear Market Leadership: A once-in-a-generation opportunity that positions Stealth as the market-leading alternative to Australia’s major hardware and industrial players: Wesfarmers (Bunnings/Blackwoods) and Metcash (IHG/Total Tools).
• Industry-Defining Expansion: — Creates a high-barrier, difficult-to-replicate, national distribution platform, within a $93 billion, highly fragmented hardware and industrial market.
• Unmatched Scale & Earnings Power: Adds ~1,165 independent retailers/stores, ~$700 million in annual purchases, and ~490 supplier partnerships, establishing Australia’s largest integrated distribution platform across hardware, industrial, safety, automotive, and workplace categories.
• Extensive Growth Catalysts & Synergies: A powerful sales and margin-expansion engine. Stealth’s FY25 investment in exclusive/private-label products, tool-hire services, and online channels will see ranging available to ~1,200 stores nationwide, a material increase from the previous plan of 32 stores.
• Compelling Financial Value: Immediately accretive and cash-generative, with extensive hard and soft synergies expected to deliver ~$8 million in annual profit synergies by FY27 and more than $200 million in incremental sales in FY28.
• Upgrades FY28 Guidance: Sales > $500 million (up from $300 million), EBITDA margin 8–12% (up from 8%), and NPAT margin 5–8% (up from 5%).

STRATEGIC RATIONALE

The acquisition of HBT is a natural, strategic bolt-on fit to Stealth’s existing wholesale division and buying-group operations, and together they immediately and significantly expand Stealth’s scale, capability, and relevance across wholesale, retail, and direct-to-business channels.

This represents a compelling strategic opportunity with substantial benefits to HBT members, suppliers, customers, and shareholders, while ensuring the business and its independent retailers and trade operators are well positioned to capitalise on anticipated market movement.

The transaction creates Australia’s largest integrated distribution network, spanning the hardware, industrial, safety, automotive, and workplace sectors, combining Stealth’s 100%-owned operations with a national network of independent, predominantly family-owned retail and trade operators that form HBT’s licensed membership base (not a franchise).

STEALTH GROUP MANAGING DIRECTOR & CEO MIKE ARNOLD SAID, “This acquisition and merger of HBT marks a pivotal moment for Stealth and for Australia’s independent hardware and industrial sector. It is transformational in scale, strategic in timing, and value-creating for our shareholders, independent operators, our team, and suppliers who see the benefit of partnering with a large alternative group.

“Our objective is to make independent operators and our 100%-owned company operations more successful and highly competitive for customers, while providing a strong channel to market for suppliers who support the alternative-independent strategy and prefer not to be beholden to one or two major players.

“The integration of HBT materially expands our national footprint and strengthens our position as the market-leading alternative to the majors. Combined, we now operate across more than 1,200 hardware and industrial locations — a uniquely capital-light, lean, and flexible cost base with a scalable distribution model that few in the market can match.

“This transaction positions Stealth to accelerate growth, improve margins, and deliver stronger, more predictable cash flows. Our wholesale and direct-to-customer model, supported by our exclusive-brand strategy, can now be deployed at scale, translating into higher earnings and long-term shareholder value.

“This is an exciting next chapter for Stealth, unlocking new opportunities for independent operators, suppliers, and shareholders alike.”

ABOUT HBT

Hardware & Building Traders (HBT) is Australia’s largest privately owned national buying group, supporting independent retail and trade-focused operators in the hardware and industrial sectors. Members supply trade professionals, DIY and retail customers across Australia.

Key Information Summary:

• Retail Network: ~1,165 stores nationally, predominantly family-owned retail and trade focused businesses.
• Supplier Base: ~490 suppliers.
• Purchase Volume: ~$645 million in FY25 purchases.
• Financials: FY25 revenue ~$6.9m, normalised EBITDA ~$3.7m; revenue primarily commission-based on member purchases with independents and suppliers transacting directly for purchasing, invoicing and fulfilment.
• Cash Generation: High free-cash-flow conversion and strong ROIC.
• Rebates: ~$30m annual rebates processed on members purchases.
• Technology: Fully integrated digital ecosystem supporting end-to-end supply-chain efficiency and member-supplier connectivity.
• Retail Store Banner – H Hardware & Industrial – 50 stores currently branded H Hardware under licence; provides a unified, nationally recognised banner with strong commercial potential within Stealth’s retail growth strategy.
• Other Banners: Remaining members trade under a range of individualised local banners.

EXPANDED SCALE, MARKET LEADERSHIP, AND EARNINGS POWER

Today, Stealth’s industrial division buying-group and wholesale operations represent approximately $100 million in annual purchases and 32 company-owned and independent store locations.

HBT represents approximately $700 million in annual member purchases across 1,165 independent retail and trade stores.

Combined, it creates a national wholesale and buying-group platform representing over $800 million in annual purchases that reflect approximately $1.3 Billion in retail sales level, ~1,300 supplier partnerships, and a network of more than 1,200 store locations across Australia.

This positions Stealth as the #1 market-leading alternative to the major industry players within a $93 billion, highly fragmented market, and accelerates Stealth’s market-leadership trajectory by almost three years, establishing a high-barrier, difficult-to-replicate national distribution platform that reinforces Stealth’s long-term competitive advantages spanning wholesale, distribution, and retail operations.

It enables Stealth to materially accelerate its FY28 strategy, expand and innovate its operating model, and grow market share through a stronger east-coast presence and an expanded product, brand, and network portfolio — underpinned by sustained sales and earnings growth and long-term shareholder value.

The transaction positions Stealth to drive growth, improve margins, and deliver stronger free cash flows, deployed at scale through wholesale distribution (B2B), direct-to-business (B2B), and direct-to-customer (B2C) channels.

By combining Stealth’s 100%-owned operations with independent retail and trade operators, the Company delivers a lean, agile, and flexible business model without the cost-of-capital intensity or fixed-cost burden of the owned-infrastructure models used by larger competitors.

Within this structure, the operating model comprises three business areas:

• As a wholesaler: Stealth runs a model that includes a buying-group function, wholesale buy/sell distribution, and member services supporting both company-owned operations and independent retail and trade operators (members of the buying group). This includes exclusive and private-label products, tool-hire programs, and member-loyalty initiatives.
• As a distributor: Stealth sources, warehouses, and delivers products directly to business and trade customers.
• As a retailer: Company operations and independent operators sell directly to end consumers instore, online, on-site, through sales teams and customer contact centres.

This model is resilient through the cycle, supported by favourable long-term demand drivers and delivering immediate uplift from a diversified offer, customer base, and national network combining company-owned operations and independent members.

It delivers unmatched national scale, category breadth, and supplier reach, positioning Stealth as the leading multi-channel distribution platform serving business, trade professionals, and retail customers nationwide.

In short, HBT today operates as a buying group, and its future expansion into a more comprehensive wholesale offer will allow scale benefits to flow through to both Stealth’s 100%-owned company operations and its independent members — creating market-leading leverage across the network.

The HBT acquisition transforms Stealth from a mid-tier player into a true national leader, establishing Australia’s market-leading alternative to Wesfarmers and Metcash.

It creates a fully scaled distribution system — from back-end sourcing and logistics through to front-end sales and customer engagement — delivering products and solutions that reach customers at every level of the hardware and industrial sector.

MERGER SYNERGIES – KEY STRATEGIES

Hard Synergies (Quantifiable)

→ Target: ~$8 million annual profit synergies by FY27.

→ Target: >$200 million sales by FY28.

• Transfer selected Stealth subsidiaries into HBT for structural efficiency.
• Expand and innovate Stealth’s offer to unlock incremental sales and earnings.
• Consolidate procurement and optimise supplier terms.
• Drive rebate uplift and expand commission income from higher volume.
• Realise distribution efficiencies via combined logistics and warehousing.
• Streamline back-office systems and administration.

Soft Synergies (Strategic)

→ Drives sustainable long-term margin and growth uplift.

• Expand exclusive-brand ranging (32 stores planned to ~1,200 stores available).
• Strengthen supplier partnerships and national buying leverage.
• Broaden customer reach and drive cross-selling across divisions.
• Accelerate digital, data, and technology capability to support omnichannel growth.
• Enhance productivity and process efficiency across operations.
• Build fulfilment capabilities via an expanded customer delivery network.

FY28 Financial Outlook (Post-HBT Acquisition)

Key catalysts that deliver growth (network expanded from 32 to >1,200 locations):

• Sales & margin growth from wholesale distribution, charge-through sales, higher volumes, buy-price synergies, exclusive/own-label expansion, new categories, online, loyalty programs, tool hire; improved stock-turn and working-capital efficiency via existing supply-chain infrastructure.
• Commercial growth in Whole-of-Build solutions, tools for trade, and solutions to
• Procurement scale & supplier leverage to optimise buying terms, rebates and
• Operational efficiency across freight, supply chain and cross-
• Membership growth via new members and potential consolidation of other buying groups into
• Network expansion using existing infrastructure and regional
• Lower cost of doing business through economies of scale, operating leverage and a simplified

POST ACQUISITION – INDUSTRIAL & HARDWARE DIVISION STRUCTURE

Stealth structure will maintain its current model of two operating divisions.

1. Industrial, Hardware & Safety Division, and
2. Consumer Products Division.

Both divisions share common distribution fundamentals: sourcing, warehousing, inventory management, delivery, and sales via field, in-store, on-site and online channels.

HBT will operate as Stealth’s dedicated buying and wholesale division for hardware and industrial products, servicing company-owned operations and independent retail and trade members. Core HBT foundations will be retained and strengthened through investment in new products, services and supplier programs.

CUSTOMER-FACING BANNERS (INDUSTRIAL & HARDWARE MARKET)

• This operating model delivers a lean, flexible, and predominantly variable cost structure, avoiding the high fixed costs, limited flexibility, and cost-of-capital burden associated with major competitors operating models.

• Independents will maintain their own individual banners, with an option to transition to a H Hardware & Industrial

INTEGRATION PLAN & BENEFITS

The integration of HBT drives growth through horizontal and vertical expansion, accelerating market-share gains, strengthening the customer value proposition, and enhancing earnings quality across Stealth and its member network.

Scale economics unlock new earnings streams from a multi-layered model combining the existing commission-fee buying-group model with a wholesale distribution model (buy-sell products, exclusive brands, tool hire, loyalty programs) and hubs for fulfilment of national contracts and online purchases.

Integration Timeline: Integration will largely be completed within 60 days, with immediate synergy gains.

FURTHER COMPLEMENTARY GROWTH INITIATIVES

• Stealth’s existing operations will be buying groups will be consolidated under HBT.
  • Trade Member Direct, Industrial Supply Group, United Tools
  • The Tool Hire Company.
  • centralised supplier-management hub
  • Transfer supplier contracts (~$100m annual purchases) into HBT.
• Expand portfolio of exclusive/own brands and services.
• Launch rewards, loyalty and subscription programs.
• Single brand ‘H Hardware & Industrial’ digital channels.
• Expand H Hardware & Industrial store footprint and destination experience.
• Continue to expand and innovate to unlock incremental sales and earnings.

WHY STEALTH’S MODEL WINS

Stealth’s Hybrid Advantage

• Hybrid advantage: corporate efficiency + independent flexibility (~1,200 stores, >$800m purchasing, Nationwide)
• Capital-light, scalable model spanning Industrial, Business, Trade, Retail and DIY.
• Exclusive brands + digital infrastructure = durable competitive moat.
• Lean, agile, flexible cost base without the cost-of-capital intensity or fixed-cost burden of owned-infrastructure models used by larger competitors.

OUTLOOK

Stealth has created a significant opportunity to drive sustainable sales and earnings growth. Its $93 billion addressable market is large, expanding, and fragmented, with strong fundamentals that underpin continued growth. The Company’s diversified model remains resilient through the cycle.

Stealth has a long track record of delivery. The Company’s commitment to expanding scale, broadening its brand portfolio, evolving its product range and offer, and deepening customer reach is underpinned by disciplined growth, a conservative balance sheet, and a focus on stronger returns.

This acquisition represents a transformational step, establishing a scaled, capital-light distribution platform with a largely variable cost base — delivering margin expansion, accelerated earnings growth, and strong free cash flow.

Stealth’s strategy — to combine the scale, assets, and infrastructure of its company-owned operations with the reach, volume, and agility of independent retail and trade operators — positions the Company as the market-leading independent alternative to major industry players Wesfarmers (Bunnings, Blackwoods, Workwear Group) and Metcash (Independent Hardware Group / Total Tools).