Builders merchant and DIY retail group Travis Perkins is to acquire tile retailer Tile Giant for £12 million.

Tile Giant has annualised sales of about£10.6 million and 29 stores, which have an average trading space of between 4,000 sq ft and 5,000 sq ft, primarily in the north of England and the Midlands. The purchase of Tile Giant, a rival to Topps Tiles, gives Travis Perkins seven brands, including DIY retailer Wickes, and another distribution channel.

In addition to the£12 million proposed purchase price, Travis Perkins will make a further payment dependent upon future performance and expansion of the business until December 2010.

Travis Perkins chief operating officer John Carter said: "Under the entrepreneurial leadership of its managing director Mo Iqbal, Tile Giant has grown rapidly and is set to become a major force in this attractive and growing market.

“The acquisition of Tile Giant provides potential for significant growth in our business and branch network and is consistent with our strategy of investing in specific adjacent market segments."