Turning its back on Irish businesses.
Wolseley disposes of Irish businesses
Published: 11 January, 2010
READING: Wolseley is to dispose of 100% of its shareholding in Wolseley Ireland Holdings Limited (WIHL) to WIBHM Limited, a private investor-backed company. The businesses were shed for €26.5m (£23.8m) and include the company's entire interest in the Republic of Ireland – the Heat Merchants, Brooks, Tubs and Tiles and Encon Ireland trading brands. It additionally includes the Brooks business in Northern Ireland. The combined businesses operate through a network of 67 branches and approximately 650 employees
Cash consideration of €6.5m (£5.8m) was paid on completion. The balance of €20m (£18m) will be satisfied through a loan note issued in favour of Wolseley at a coupon of 10%, to be repaid within one year.
Under the terms of the agreement, Wolseley has agreed to fund the deficit in the Northern Ireland pension scheme (currently estimated to be €5.5m (£4.9m), and this will be repaid by the purchaser by means of a separate loan note with a coupon of 3%.
Wolseley is disposing of the businesses in line with its strategy of focusing its activities where it has built sufficient scale, established leading market positions and can deliver an appropriate financial return.
In the year ended 31 July 2009, the businesses had combined sales of €237m (£204m) and underlying operating losses of €34m (£30m).
Commenting on the disposal, Ian Meakins, chief executive of Wolseley, said: "I am confident that the transaction we have concluded with WIBHM Limited represents a good outcome for Wolseley's shareholders. It will also enable us to bring an even greater degree of focus on driving performance improvement in our core UK businesses."