Integration of Wilson Bowden
Barratt Developments PLC
30 April 2007
Under embargo for 9.00am 30 April 2007
Barratt Developments PLC
Integration of Wilson Bowden
Following the completion of the acquisition of Wilson Bowden on 26 April 2007,
Barratt Developments PLC ('Barratt') today announces its initial integration
plans for the combined business, including the brand architecture and the
organisational structure.
The integration plan is designed to ensure that the combined Group delivers the
anticipated synergies and the strategic benefits of the acquisition as quickly
as possible ensuring that the Group is well positioned to drive organic growth.
Barratt has already stated that it aims to deliver annualised pre-tax cost
synergies from operational and purchasing efficiencies of at least £45 million
in the second full year after completion of the deal. One-off exceptional costs
of £35 million are expected to be incurred in realising these synergies*.
Barratt also confirms that both businesses continue to trade in line with
expectations.
Key features of the integration plan are as follows:
•The enlarged Group intends to focus on two strong national brands for its
house building activities across Great Britain, Barratt Homes and David
Wilson Homes. The strong local brand, Ward Homes, will be retained in Kent.
•The KingsOak brand is being dropped from the business and its activities
will be integrated with those of the Barratt and David Wilson branded
operations as appropriate.
•A reorganisation of the regional network of divisional offices will also
commence immediately to create optimally sized house building divisions.
This will involve some closures and merging of existing offices and it is
therefore planned to consult on the closure of 9 divisional offices. There
will be no impact on the number of sites or site based staff.
•Following these changes to the divisional structure of the housebuilding
business, it is envisaged that the Group will operate 35 housebuilding
divisions, comprising 22 Barratt, 10 David Wilson, 2 dual branded divisions
and 1 Ward Homes.
•All the Group's housebuilding divisions will operate within a unified
management structure reporting to six Regional Managing Directors who will
in turn report to the Executive Directors North and South.
•Wilson Bowden Developments, the commercial development business, will
report directly to Mark Clare, Chief Executive, and be run as a separate
unit but with a specific brief to work with the housebuilding divisions to
deliver extra value. It will continue to be led by Nick Richardson who will
join the Barratt Executive Committee.
•We propose to consult with corporate centre staff at both head office
locations as we rationalise these functions with the likely closure of both
offices. In addition, we will be consulting on significantly reducing the
operational support activities based in Ibstock through sale or closure of
various elements. It is envisaged that an office will be maintained in
Leicestershire and any remaining central functions in Newcastle will be
relocated around our divisional operations.
•Implementation of these initial integration measures is expected to
affect at least 400 jobs. Where possible, redundancies will be minimised
through natural staff turnover and redeployment.
•The Non Executive Directors of Wilson Bowden plc have resigned and the
Executive Directors (with the exception of Nick Richardson) have left or
will shortly leave. The Barratt Developments PLC Board will remain
unchanged.
Mark Clare, Chief Executive, commented: 'When we announced the acquisition of
Wilson Bowden I said there was an excellent strategic fit between the two
companies. Since then my confidence that we will be able to deliver an enhanced
performance by exploiting the strengths of both companies has been further
reinforced.
'These early actions are designed to integrate the businesses as soon as
possible delivering cost reductions, a strong management team and improved
operational performance. At the same time they create the right foundation for
us to exploit our improved land position, stronger brands, better geographical
spread and strength across the product range.
'It is always regrettable to have to announce redundancies but we have acted
swiftly to remove the uncertainty employees have inevitably faced. We will do
everything we can to ensure that we integrate the businesses as quickly and as
smoothly as possible.'
- Ends-
For further information please contact:
Weber Shandwick Financial 020 7067 0700
Terry Garrett/Chris Lynch/Nick Dibden
* The expected synergies have been calculated by Barratt on the basis of the
existing and projected cost and operating structures of Barratt and Barratt's
estimate of the existing and projected cost and operating structures of Wilson
Bowden. Statements of estimated synergies relate to future actions and
circumstances which, by their nature, involve risks,uncertainties, contingencies
and other factors. As a result, the synergies referred to may not be achieved,
or those achieved may be materially different from those estimated.
This information is provided by RNS
The company news service from the London Stock Exchange
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