Stealth Group Holdings surges 48% as A$22m HBT acquisition unlocks national scale

Stealth Group Holdings surges 48% as HBT acquisition transforms it into Australia’s largest independent hardware network

Stealth Group Holdings (ASX: SGI), in a market long dominated by giants like Bunnings and Metcash’s IHG, Stealth is stepping up with a clear mission to become the country’s largest independent alternative. The company’s A$22 million acquisition of Hardware & Building Traders (HBT), Australia’s biggest privately owned hardware buying group, marks a turning point in its growth story.

This deal is more than just an expansion. It positions Stealth Group Holdings to command real scale in a fragmented A$93 billion market while keeping its capital-light advantage intact. The numbers tell a powerful story: over 1,200 locations, A$800 million in annual purchases, and a fivefold increase in reach almost overnight. More importantly, management has upgraded its FY28 guidance to sales above A$500 million and EBITDA margins of 8–12%, signalling a significant step-change in earnings power.

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Stealth Group Holdings targets A$500M sales and double-digit margins as HBT acquisition drives scale

The acquisition of HBT immediately elevates Stealth from a mid-tier distributor to the number one independent player in Australia’s A$93 billion hardware and industrial supply market. The combined network now manages over 1,200 store locations and around A$1.3 billion in implied retail sales.

Stealth’s upgraded FY28 targets show how meaningful this acquisition is to its bottom line. The company expects to grow sales from over A$300 million to more than A$500 million, with EBITDA margins rising to between 8–12%. The expansion of private-label and exclusive brands from 10% to 40% of total sales is particularly important, as it boosts gross margins and brand loyalty. Additional upside comes from improved supplier rebates, greater procurement leverage, and the rollout of loyalty and tool hire programs across the newly expanded footprint.

By integrating HBT into its existing network, Stealth expects around A$8 million in annual profit synergies and over A$200 million in incremental sales by FY28. These efficiencies will come from centralised procurement, shared logistics, and digital integration, effectively turning scale into profit.

The investors Takeaway for SGI

From an investor’s standpoint, Stealth Group Holdings acquisition of Hardware & Building Traders represents both a bold opportunity and a measured risk. On one hand, the deal significantly enhances Stealth’s scale, supplier leverage, and market relevance. The addition of HBT’s 1,200-member network and A$800 million in purchasing volume gives Stealth national reach, stronger pricing power, and a larger platform to roll out its private-label products.

However, execution will be critical. Integrating supplier agreements, IT systems, and independent member networks comes with operational complexity. Maintaining loyalty among HBT’s independent store owners will be essential to preserve buying power and scale benefits. While the transaction is debt-funded, leverage remains reasonable, though rising interest rates could modestly tighten free cash flow in the short term.

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