Wolseley, the FTSE 100 materials company, has agreed to buy Brandon Hire for 212p a share, valuing the company at £71.9m.

The bid has been recommended by the Brandon Hire board, advised by Close Brothers. It has received substantial backing, with undertakings of support from shareholders holding 36% of the firm.

The bid represents a 38.6% premium on the share price of 153p at the close of business on 28 December 2005, the day before Brandon Hire announced it had given permission for a management team to explore a buyout.

Wolseley, which was advised by UBS on the offer, said on Tuesday that the acquisition would strengthen its business, in particular its tool hire business.

John Laycock, Brandon Hire chief executive, said that the offer represented value for shareholders and "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 has assured Brandon Hire's staff that their terms and conditions, including pension rights, will be safeguarded.