Disposals from Manufacturing Division
Wolseley PLC
25 April 2000
Wolseley plc announces the disposal
of certain businesses from its manufacturing division
Wolseley today announced the sale of certain businesses from its manufacturing
division to Cinven, the leading provider of private equity for larger European
buyouts, for a cash consideration valuing the businesses at a maximum amount
of £136.5 million.
The businesses included in the sale represent all of Wolseley's Manufacturing
division, except for its energy businesses and comprise the agricultural,
cable management, industrial, motor and photographic businesses in that
division.
The management team will be led by Rubicon Partners. Rubicon Partners have
worked with Cinven for a number of years and have been responsible for the
development of Cinven's investee company Vector Industries.
In the year ended 31 July 1999, these businesses made an operating profit of
£23.2 million on turnover of approximately £262 million. As at that date they
had operating assets of approximately £86 million.
The cash amount receivable by Wolseley in respect of the sale is approximately
£102 million. This reflects the fact that £6.5 million of the value is
represented by deferred consideration, the receipt of which is dependent on
future performance of the businesses; a deduction of £23 million has been made
to cover estimated external and intra-group debt; and Wolseley is assuming
responsibility for certain pre-completion tax liabilities amounting to
approximately £4.5 million.
The sale, which follows an auction process conducted by KPMG Corporate
Finance, will give rise to an estimated loss on disposal of approximately £38
million. After adding back goodwill of £65 million previously written off to
reserves, shareholders funds will be increased by approximately £27 million.
The proceeds will be used to help finance the group's ongoing acquisition
programme within its core building distribution activities.
John Young, Chief Executive of Wolseley said, 'The sale of these businesses
reflects our desire to focus on our building materials distribution activities
to enhance further our position as the world's largest specialist trade
distributor of heating and plumbing products. We believe that the sale of the
businesses is in the best interests of our shareholders and will present new
opportunities for the management and employees of the acquired companies.'
Guy Davison, a director of Cinven, commented, 'We are delighted to have been
able to acquire these businesses from Wolseley. We have had considerable
experience in managing groups of disparate businesses such as these and we are
confident that we will be able to develop them further and add significant
value.'
For further information:
John Young - Group Chief Executive
Steve Webster - Group Finance Director
Wolseley plc - Telephone 01905 777200
Tony Knox - Financial Dynamics
Telephone 020 7831 3113
_____________
Guy Davison
Cinven - Telephone 020 7661 3333
Deborah Ardern-Jones - Financial Dynamics
Telephone 020 7831 3113
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