Wolseley's Steve Ashmore: Build Center, free to realise its full potential.
Wolseley announces sale of Build Center to Jewson
Published: 25 July, 2011
Build Center employs around 1600 people and operates through a network of 155 branches. Its turnover was £316m (€360m) for the fiscal year ended 31 July, 2010.
This transaction is strategically consistent with Wolseley UK's ambition to focus its efforts and investment on businesses that are of sufficient scale and which are equipped to compete successfully for market leadership. Representing a total amount of £145m (€165m) – including 86 real estate locations – the acquisition will enable Jewson to consolidate its position as leading general builders' merchant in the UK.
Wolseley UK's managing director Steve Ashmore said: "I truly believe that selling Build Center sets them free to realise their full potential. Equally important, it enables Wolseley UK to provide our remaining businesses with the level of investment and dedication needed to achieve the aim of becoming the best merchant in all our chosen markets."
The sale of Build Center is subject to regulatory review by the European Commission. Wolseley UK anticipates that the sale will complete shortly after the Commission has concluded its review, which is expected to be in the last quarter of 2011.
Wolseley, the world's largest supplier of plumbing and heating products, put Build Center up for sale in May as part of its programme of divesting non-core assets.
According to industry insiders, Wolseley could have kept the business, cut down the number of branches and held on to core outlets. The new buyer will have to start by making cuts.
Saint-Gobain and Wolseley also entered exclusive negotiations for the acquisition of Brossette. Specialising in the distribution of plumbing, heating and sanitary products in France, this brand has a very good reputation in the market.
Backed by a network of 361 outlets across the country, it also promises a strong geographic fit with the French plumbing, heating and sanitary business of Saint-Gobain Building Distribution Sector, which primarily operates under the Cedeo brand.
Brossette generated €714m in revenue in the fiscal year ended 31 July, 2010 and employs 2650 people. The €186m acquisition would enable Saint-Gobain to enhance its position in the plumbing, heating and sanitary distribution business in France and more broadly in this business in Europe, where it already has prime positions thanks in particular to Dahl in the Nordic countries and Graham in the UK.
Pierre-André de Chalendar, chairman and chief executive officer of Saint-Gobain commented that: "These two acquisitions, which will add more than €1bn of sales, are perfectly in line with the strategy of Saint-Gobain. They will further develop our building distribution sector and complement the geographical presence in two of the sector's key businesses – general building distribution in the UK and plumbing, heating and sanitary products in France – while creating significant synergies, particularly in the areas of purchasing and logistics."