4th Jan 2021 09:03
(Alliance News) - Ferguson PLC on Monday said it has sold its heating & plumbing distribution business Wolseley UK to US private equity firm Clayton, Dubilier & Rice LLC for GBP308 million.
In the financial year that ended July 31, the unit generated revenue of USD1.88 billion. The sale means Ferguson can "focus entirely" on its North American business, noted Chief Executive Kevin Murphy.
"We are confident the business will benefit from working with its new owners, Clayton, Dubilier & Rice who will develop the business further by focusing on continued opportunities in the industry," added Murphy.
Ferguson said it expects the transaction to complete at the end of January.
The GBP308 million net cash consideration takes into account the UK operations' pension liabilities. Ferguson said future responsibility for Wolseley's defined-benefit pension scheme will be retained within the Ferguson Group. It said the net pension liability on July 31 last year was USD27 million.
Back in September 2019, Ferguson had announced plans to separate the Wolseley UK business and list it as an independent company in London.
However, this past September, Ferguson said a stock market listing "remains uncertain in the current economic environment and consequently the board is assessing other separation options in parallel with progress towards the demerger to facilitate the exit of the Wolseley UK business."
Following completion of the disposal to the US private equity firm, Ferguson said it will update shareholders on the use of the proceeds of sale. Ferguson's current intention is to make a return of substantially all of the net cash proceeds of sale to shareholders by way of a special dividend.
Rothschild & Co is acting as financial advisor to Ferguson in relation to the disposal.
Ferguson shares were trading 0.2% lower in London on Monday at 8,868.00 pence each.
By Evelina Grecenko; [email protected]
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