Ferguson signs £ 308million sale of his plumbing supplies business Wolseley UK

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erguson has agreed to sell its Wolseley UK plumbing supplies division in a £ 308million deal to Clayton, Dubilier & Rice.

Plumbing supply company FTSE 100 said it has entered into a deal with the global private investment firm.

Ferguson had started considering a spin-off of the company in late 2019, then was considering a sale later in 2020.

In the fiscal year ended July 31, Wolseley UK generated revenue of $ 1.9 billion and underlying business profit of $ 8 million.

Wolseley UK has 542 branches in Great Britain, three distribution centers and approximately 4,400 full-time employees.

The UK company generates sales in several ways, such as its repair and maintenance services, and the supply of new construction products.

Following completion of the divestiture, future liability for the UK defined benefit pension scheme will remain within the Ferguson Group.

The sale is expected to be finalized at the end of this month. After that, Ferguson plans to educate shareholders on the use of the proceeds of the sale.

The board’s current intention is to return substantially all of the net cash proceeds from the sale to shareholders by way of a special dividend.

Rothschild & Co advises Ferguson on the transaction.

Kevin Murphy, Managing Director of Ferguson, said: “Wolseley is one of the UK’s leading heating and plumbing distribution companies and we are confident the company will benefit from working with its new owners, Clayton, Dubilier & Rice, who will further develop the business by focusing on continued opportunities in the industry.

Murphy added, “The transaction further simplifies the group and allows us to focus entirely on investing and developing our business in North America, where we have the greatest opportunities for profitable growth. ”

Clayton, Dubilier & Rice, which has offices in London and New York, said the transaction represents the twelfth investment in construction products and industrial distribution it has made in the past decade.

CD&R partner Christian Rochat said: “Wolseley is a market leading distribution platform in an industry where CD&R has extensive experience and great success, and we believe this represents a compelling opportunity to invest. at an inflection point and working with a highly credible management team. to drive operational improvements and accretive mergers and acquisitions. “


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