1st Nov 2005 07:43
Wolseley PLC01 November 2005 NEWS RELEASE 1 November 2005 Wolseley plc Wolseley announces the acquisition of William Wilson, a leading UK distributor of plumbing, heating and electrical supplies, for £81 million Wolseley plc, the world's largest specialist trade distributor of plumbing andheating products to professional contractors and a leading supplier of buildingmaterials, announced today that it has acquired William Wilson Holdings Ltd("William Wilson"), a leading distributor of plumbing, heating and electricalsupplies in the UK. The acquisition provides Wolseley UK with a substantialentry point into the electrical market. Since the beginning of the financial year on 1 August 2005, a total of 11distribution businesses in Europe and North America have been acquired for anaggregate consideration of approximately £317 million in cash. These 11acquisitions are expected to add approximately £462 million to group turnover ina full year. Goodwill related to these acquisitions is estimated to be around£220 million. Wolseley UK acquired William Wilson on 31 October 2005 from 3i and a largenumber of individuals and trusts. The acquisition is in line with Wolseley'sstrategy of expanding its European distribution operations into relatedconstruction materials. The cash consideration of £81 million will be financedfrom Wolseley's existing resources. The William Wilson business The company has approximately 600 employees and operates from a network of 45trading locations in Scotland and the North of England. It is organised into twospecialist divisions. The Plumbing and Heating Division, which accounted for 60%of turnover for the year ended 31 March 2005, has 20 locations and includesScotland's largest bathroom showroom network with a total of ten outlets. TheElectrical Wholesale Division has a network of 25 locations and accounted for40% of the turnover for the same period. Many of William Wilson's suppliers in its Plumbing and Heating Division arecommon to Wolseley UK's supplier base and this is expected to createopportunities for purchasing synergies. It is also expected that supply chainefficiencies will be created by utilising existing distribution centres. The Electrical Wholesale Division will be expanded by an aggressive programme ofbranch openings which should provide additional scale benefits. The operational management of William Wilson will remain with the business andjoin the Wolseley group reporting to Adrian Barden, Managing Director, WolseleyUK. Financial effects of acquisition For the year ended 31 March 2005, William Wilson reported sales of £104.7million and a normalised profit before interest and goodwill of £4.0 million.Gross assets at that date were £42.0 million. The business has achievedsubstantial growth in its current financial year to date. The acquisition isexpected to be earnings enhancing from the outset. The return on gross capitalemployed is expected to achieve Wolseley's normal acquisition return target fora strategic acquisition. Charlie Banks, Group Chief Executive of Wolseley said: "We are delighted to announce this acquisition which further strengthens ourpresence in the UK market. As well as significantly expanding our operations inthe North of England and Scotland, the acquisition of William Wilson enables usto develop our presence in these regions and to expand the range of constructionproducts we distribute to now include electrical supplies. We remain committedto growing the business at double-digit rates through a combination of organicand acquisition growth." The divisional split of the total acquisition spend since 1 August 2005 is: Division No. of Acquisitions Spend £ million European Distribution 4 242North American Plumbing & Heating 7 75DistributionUS Building Materials Distribution - - TOTAL 11 317 ENQUIRIES: Investors/Analysts: Guy Stainer 0118 929 8744 Head of Investor Relations 07739 778 187 Press: Penny Studholme 0118 929 8886 Director of Corporate Communications Brunswick 020 7404 5959 Andrew Fenwick Deborah Fairbrass Certain statements included in this announcement may be forward-looking and mayinvolve risks, assumptions and uncertainties that could cause actual results todiffer materially from those expressed or implied by the forward lookingstatements. Forward-looking statements include, without limitation, projectionsrelating to results of operations and financial conditions and the Company'splans and objectives for future operations including, without limitation,discussions of the Company's business and financial plans, expected futurerevenues and expenditures, investments and disposals, risks associated withchanges in economic conditions, the strength of the plumbing and heating andbuilding materials market in North America and Europe, fluctuations in productprices and changes in exchange and interest rates. All forward-lookingstatements in this respect are based upon information known to the Company onthe date of this announcement. The Company undertakes no obligation to publiclyupdate or revise any forward-looking statement, whether as a result of newinformation, future events or otherwise. It is not reasonably possible toitemise all of the many factors and events that could cause the Company'sforward-looking statements to be incorrect or that could otherwise have amaterial adverse effect on the future operations or results of the Company. Notes to Editors Wolseley plc is the world's largest specialist trade distributor of plumbing andheating products and a leading supplier of building materials to professionalcontractors in North America, the UK and Continental Europe. Group sales for theyear ended 31 July 2005 were approximately £11.3 billion and operating profit,before goodwill, was £721 million. Wolseley has around 60,000 employeesoperating in 14 countries namely: UK, USA, France, Canada, Ireland, Italy, TheNetherlands, Switzerland, Austria, Czech Republic, Hungary, Belgium, Luxembourgand Denmark. Wolseley is listed on the London and New York Stock Exchanges (LSE:WOS.L, NYSE: WOS) and is in the FTSE 100 index of listed companies. -- ENDS -- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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