Wolseley heats up with £310m sell-off
Leamington Spa-based Wolseley has disposed of its Build Center division as part of a £310m sell-off. The heating and plumbing specialist has agreed a deal with Coventry-based Saint Gobain, through which its Build Center and Brossette businesses will be bought. Wolseley said the deals were the "last significant disposals planned" following last year's strategic review.
Build Center, its building materials distribution business in the UK, will be sold to constructive materials distributor Saint Gobain. The disposal of Build Center will complete for £145m when the transaction has received competition clearance, said Wolseley.
The two companies have also entered into exclusive discussions to sell plumbing and heating distribution business Brossette, in France. The businesses is expected to be sold for £165m.
Total payment for the two transactions is £310m.
The deal comes just weeks after Wolseley sold its £130m-turnover Electric Center to Edmundson Electrical.
Ian Meakins, chief executive of Wolseley, said: "The transactions we have announced today are the last significant disposals planned following last year's strategic review. We will continue to focus and invest in our strongest businesses in core markets including building materials and wood solutions in France and plumbing, heating, pipe, climate and associated businesses in the UK."
In the year ended 31 July 2010, Build Center generated revenue of £316m and trading profit of £1m. In the 11 months ended 30 June 2011, revenue was £294m and trading profit was £4m.
The company's Brossette division generated revenue of £590m and trading profit of £5m for the 11 months ending 31 June 2011. Net assets of the business are approximately £150m.
In a statement this morning (25 July) Wolseley said it would review "the size and scale of the functions required to support the remaining core business going forward". It added that associated restructuring costs were expected to amount to about £15m.
Meakins added: "When concluded, these transactions should present good opportunities for staff transferring and ensure that our customers' ongoing needs are well met. I would like to pay tribute to the considerable commitment and energy of our staff in Brossette and Build Center and thank them for all of their hard work during an uncertain period."
