Mr Eddie Battersby and his wife Liz, founders of Eddies Hardware in Drogheda, are the sole beneficiaries of the €11.25 million sale of the company to Heiton Group.

Mr Battersby and his wife set up the business 15 years ago in an old jail and have steadily built it up into a company with an operating profit of €1.2 million on turnover of €11.5 million last year.

"It's a fairytale. I sold my car and mortgaged the house to set it up," Mr Battersby told The Irish Times. "It has surpassed my wildest dreams although it is a sad moment to sell it."

Heiton is paying the Battersbys €8.4 million plus payment for cash balances in the business estimated at €2.85 million. The deal also involves a potential earnout of €2.85 million, which is dependent on profits over the next three years.

"It's a good deal for both of us," said Mr Battersby, who has worked in the hardware business since he was 14. He plans to remain with the business for the next three years, to realise the earnout and "look after the customers".

Asked what plans he had for his windfall, he said: "It's been a bit hectic lately with the legalities and all... I think I'll sit back and wait for a while."

Mr Eddie Kelly, the managing director of Heiton Trade, said Drogheda had been high on the company's wish list for some time and buying Eddies was preferable to going the slower greenfield route.

"It's a very good business with a nice mix of the heavy side and the light side. We expect to bring considerable purchasing synergies to it," he said, adding this should allow it to lift the 10 per cent margin in the business by a considerable amount.

Analysts said the deal should be immediately earnings enhancing, adding 1.3-1.5 cents to earnings per share in a full year. The acquisition also represents Heiton's first move into the northeast, an area that is developing rapidly.

However, Goodbody Stockbrokers, brokers to rival Grafton Group, described the acquisition as expensive noting that the multiple of one times sales was higher than that typically paid for merchanting companies.

"We believe the price paid for this bolt-on looks expensive and it will be difficult to generate group returns from the acquisition, especially if the Irish housing market starts to slow down," the broker said.