Building, heating and plumbing products supplier Wolseley is poised to double its tool hire operation with an approved £71.9 million offer for rival Brandon Hire.
Wolseley, the world's biggest company of its kind, has 135 UK Hire Center branches but will add another 143 Brandon sites, backed by Brandon's managers.
The Reading-based FTSE 100 company, which employs more than 60,000 people worldwide and recently set up a new UK headquarters at Leamington Spa, said it saw the opportunity for an estate of 400 branches.
It plans to keep the Brandon Hire brand, which it described as "highly respected".
The proposed deal, which still requires the approval of shareholders, will net more than £17 million for Brandon Hire chairman John Laycock, who owns almost 24 per cent.
The 212p-a-share offer represents a 15.2 per cent premium on Brandon's share price of 184p at market close on Monday and is 38 per cent more than the level seen before the Bristol-based company announced in December it had given management permission to explore a buy-out.
Also, it is 50.4 per cent higher than the average closing price of 141p per share for the three months to December 28, 2005.
Wolseley said it received irrevocable undertakings in respect of 12.3 million Brandon shares, or 36.2 per cent of the issued capital.
Chief executive Charles Skinner and finance director Chris Sims were interested in a deal, although Brandon revealed earlier this month that it had received other approaches.
Among the potential bidders was Speedy Hire, which bought 375,000 ordinary shares, or 1.11 per cent of the Brandon equity, in January.
Brandon is one of the four largest tool hire operators in the United Kingdom with about six per cent of the market. It achieved sales of £57.1 million last year.
Its heartland is still the South West of England, but the company has steadily expanded with the opening of six new stores in cities including Edinburgh, Middlesbrough and Cambridge, as well acquisitions in Sheffield and the East Midlands, in 2005.
Wolseley said its financial power would enable Brandon to press ahead with plans for more openings and continued organic growth.
Chief executive Charles Banks said: "We are delighted to have reached agreement with the board of Brandon Hire.
"The transaction represents a further step in our strategy to broaden our product and geographic reach by enhancing our hire offering across the UK."
Mr Laycock said of the Wolseley offer: "It not only represents excellent value to shareholders, but also secures a strong future for the company and its employees as part of a group with a proven track record of developing its acquisitions."
Wolseley's other major brands include Plumb Center, Pipe Center and Ireland-based Brooks Group.
It has pledged to retain all Hire Center and Brandon Hire branches, as well as the Brandon Hire management team and office in Bristol.