Acquisitions Update
Wolseley PLC
18 October 2005
NEWS RELEASE
18 October 2005
Wolseley plc
£87 Million Spent on Eight Acquisitions since 1 August 2005
Wolseley plc, the world's largest specialist trade distributor of plumbing and
heating products to professional contractors and a leading supplier of building
materials, issues an update on acquisitions made.
Since the beginning of the financial year on 1 August 2005, an additional eight
distribution businesses in Europe and North America have been acquired for an
aggregate consideration of approximately £87 million in cash.
In total, the eight acquisitions completed to date are expected to add
approximately £170 million to group turnover in a full year. Goodwill related to
these acquisitions is estimated to be around £45 million.
European Distribution
At the end of September, Wolseley UK acquired HGH Plumbing Supplies ('HGH') from
Mr P Lake and Mr G Hadridge. HGH is a specialist merchant of plastic above
ground drainage products and operates from one location in Tunbridge Wells,
Kent. In the year ended 31 January 2005, HGH achieved sales of £5.9 million and
had gross assets of £1.9 million at that date.
In October, Wolseley acquired the Centratec Group ('Centratec') from Immo Eera
N.V and Mr P Frateur. Centratec is a distributor of domestic and commercial
heating equipment and pipes valves and fittings (PVF). Centratec operates from 6
locations focused on the central and eastern regions of Belgium. Centratec
achieved sales of €42.1 million (£28.8 million) in the year ended 31 December
2004 and had gross assets of €21.5 million (£14.7 million) at that date.
North American Plumbing and Heating Distribution
In August 2005, Wolseley Canada acquired Sudbury Valve Fitting & Control Ltd.
('SVFC') from SVFC Holdings Inc. and members of the Smith family. SVFC
specialises in supplying industrial valves, valve actuation and instrumentation
to the mining, pulp and paper and related industries in Northern and Central
Ontario and Quebec from its location in Sudbury, Ontario. In the year ended 31
May 2005, SVFC had sales of C$4.8 million (£2.1 million) and had gross assets of
C$0.9 million (£0.4 million) at that date.
Also in August 2005, Ferguson acquired certain assets associated with the
business trading as Park Supply, headquartered in Chicago, IL. Park Supply is a
wholesale distributor of heating, ventilation, cooling, hydronics equipment and
supplies. In addition to the headquarters in Chicago, the acquisition includes
seven other Chicago area locations and one in Hammond, Indiana. The purchase of
Park Supply will significantly increase Ferguson's presence in the northern
Illinois marketplace and expand its customer base. In the year ended 31 December
2004, Park Supply had sales of $48.5 million (£26.9 million) and had gross
assets of $19.9 million (£11.1 million) at that date.
Additionally in August 2005, Ferguson acquired certain assets from S&S
Fabrication and Supply Co., ('S&S') located in Mechanicsville, VA. This
acquisition will increase Ferguson's ability to provide fire protection services
in the Hampton Roads area and strengthen its presence in Northern Virginia/D.C.
S&S will trade as Ferguson Fire and Fabrication. In the year ended 31 December
2004, S&S had sales of $1.7 million (£0.9 million) and had gross assets of $0.4
million (£0.2 million) at that date.
In September 2005, Ferguson acquired certain assets of Contractors Field
Products, Inc., trading as CFP. CFP is a geotechnical and environmental sitework
supplier headquartered in Charlotte, NC. Geotextiles and erosion control
products complement and are a natural extension of Ferguson's existing
waterworks line. In the year ended 31 December 2004, CFP had sales of $13.2
million (£7.3 million) and had gross assets of $3.7 million (£2.0 million) at
that date.
Also in September 2005, Ferguson acquired Economy Plumbing & Heating Supply Co.,
Inc., ('Economy') from members of the Abrams family. Economy is a wholesale
distributor of plumbing and heating equipment, supplying to the commercial and
residential markets based in Philadelphia, Pa. In the year ended 31 July 2005,
Economy had sales of $26.1 million (£14.5 million) and had gross assets of $8.1
million (£4.5 million) at that date.
Additionally in September 2005, Ferguson acquired Endries, Inc. and Endries
International, Inc. ('Endries') from members of the Endries family and a family
trust. Endries is an international provider of Vendor Managed Inventory (VMI)
programs for the Original Equipment Manufacturer (OEM) and Maintenance, Repair
and Overhaul (MRO) industries. Endries has a branch network of 70 locations
across America and also has small operations in Canada, the UK and the
Netherlands.
The principal products supplied by Endries include, fasteners and hardware,
electrical components, pipe, valves and fittings (PVF) as well as tools,
accessories and industrial supplies. In the year ended 31 July 2005, Endries had
sales of $149.5 million (£83.1 million) and had gross assets of $57.7 million
(£32.1 million) at that date.
The segmental split of the total acquisition spend since 1 August 2005 has been:
Division No. of Spend
Acquisitions £ million
European Distribution 2 20
North American Plumbing & Heating Distribution 6 67
US Building Materials Distribution - -
TOTAL 8 87
Charlie Banks, Group Chief Executive of Wolseley said:
'I am very pleased to be able to announce these acquisitions within our first
quarter which will further strengthen our presence in Europe and also in North
America. They support our strategy of growing the business through acquisition
and organic growth.'
Exchange Rates
The following exchange rates have been used for the acquisitions noted above:
£1 = $1.80, £1 = €1.46, £1 = C$2.29.
ENQUIRIES:
Investors/Analysts:
Guy Stainer 0118 929 8744
Head of Investor Relations 07739 778187
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 may
involve risks, assumptions and uncertainties that could cause actual results to
differ materially from those expressed or implied by the forward looking
statements. Forward-looking statements include, without limitation, projections
relating to results of operations and financial conditions and the Company's
plans and objectives for future operations including, without limitation,
discussions of the Company's business and financial plans, expected future
revenues and expenditures, investments and disposals, risks associated with
changes in economic conditions, the strength of the plumbing and heating and
building materials market in North America and Europe, fluctuations in product
prices and changes in exchange and interest rates. All forward-looking
statements in this respect are based upon information known to the Company on
the date of this announcement. The Company undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. It is not reasonably possible to
itemise all of the many factors and events that could cause the Company's
forward-looking statements to be incorrect or that could otherwise have a
material 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 and
heating products and a leading supplier of building materials to professional
contractors in North America, the UK and Continental Europe. Group sales for the
year ended 31 July 2005 were approximately £11.3 billion and operating profit,
before goodwill, was £721 million. Wolseley has around 60,000 employees
operating in 14 countries namely: UK, USA, France, Canada, Ireland, Italy, The
Netherlands, Switzerland, Austria, Czech Republic, Hungary, Belgium, Luxembourg
and 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 --
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