Wolseley to sell UK divisions
Published: 31 May, 2011
LEAMINGTON SPA: Wolseley has put three UK divisions, including Build Center, up for sale.
Bank of America Merrill Lynch has been appointed to handle the sales, which will also include electrical products wholesaler Electric Center and insulation specialist, Encon.
Build Center has 200 stores but has struggled during the recession with revenues last year down some £300m. Travis Perkins, Grafton, and Saint-Gobain have all registered an interest.
Travis Perkins has been touted as a likely suitor for the business and people close to the company confirmed that it was interested but said it was unlikely anything would be agreed in the near future, the Financial Times reported.
According to the FT, any buyer is likely to have dispose of depots as many of the Build Center outlets were underperforming.
Wolseley is also said to be close to announcing a buyer for its French plumbing and heating business, Brossette. However, the bathroom chain, Bathstore is now likely to remain within the group despite reports earlier in the year that a deal had been struck with private equity group Electra.
The sale of Brossette and the three UK businesses is expected to mark the end of the disposal programme instigated by chief executive Ian Meakins since becoming Wolseley chief executive in 2009.
Mr Meakins has overseen a radical overhaul of the company's operations, including a number of disposals of units seen as non-core, including its French and Irish businesses.
The group also shifted its tax residence to Switzerland last year in a move that will cut its underlying tax rate from 34% to 28%.
Wolseley gives an update on it third quarter performance next week after a first half that saw it post a profit after two years of annual losses and also return to the dividend list. Analysts forecast that Wolseley, which moved its tax base to Switzerland last year, will make profits of £605m on revenue of £13.6bn.
Wolseley declined to comment on the reports.