Energy Business Sold, Plastics Business Bought
Wolseley PLC
1 November 1999
Wolseley announces the disposal
of its energy businesses and the
acquisition of two companies
Disposal
Wolseley announces today the conditional sale of its boiler and burner
manufacturing businesses to a company formed for the purpose by Industri
Kapital, for a total consideration of £86.8 million.
The total consideration includes the assumption of pensions liabilities and
certain indebtedness amounting to approximately £12.0 million. In the year
ended 31 July 1999, these businesses made an operating profit of £9.8 million
on turnover of £128.4 million. The sale of these businesses is conditional
upon, inter alia, competition clearance and the formal completion of the
funding arrangements. The sale will give rise to a loss on disposal of
approximately £6 million, after taking account of goodwill of £47.4 million
previously written off to reserves. The proceeds will be used to help finance
the group's ongoing acquisition programme.
Acquisitions
Two further acquisitions have been made by Wolseley since its Preliminary
Announcement on 28 September 1999 for an aggregate estimated consideration,
including debt, of approximately £9 million.
On 7 October 1999, Wolseley Centers Limited acquired Instalrite Plastics Ltd,
a distributor of industrial plastics products, operating from one location in
Windsor. For the year ended 31 October 1998, Instalrite reported sales of
£4.7 million. The business will be integrated within the commercial and
industrial division of Wolseley Centers.
On 8 October 1999, a subsidiary of Wolseley plc, acquired Comptoir des Fers et
Metaux SA ('CFM'), the leading distributor of plumbing, heating and
sanitaryware products and pipes, valves and fittings in Luxembourg. The
business operates from two locations and also sells into Belgium. Sales for
the year ended 31 December 1998 amounted to LUF 1.9 billion (£30 million).
Jacques Descours, Managing Director of Brossette BTI and responsible for
Wolseley's Southern European operations, will have overall management
responsibility for CFM. Many of CFM's suppliers are common to Wolseley's
other European operations and it is expected that synergies will be achieved
between those operations and CFM. This acquisition underlines Wolseley's
position as the number one distributor of plumbing, heating and sanitary-ware
in Europe. The entry by Wolseley into the new market of Luxembourg follows
recent entries into the Republic of Ireland and Italy during the financial
year ended 31 July 1999. Both acquisitions in the Republic of Ireland and
Italy are performing in line with expectations.
These acquisitions bring Wolseley's total acquisition spend, including debt
acquired, to approximately £78 million in the 1999/2000 financial year to date
and should add approximately £200 million to the Wolseley group turnover in a
full year.
Note: The exchange rate used in this announcement is £1 = 63.11
Luxembourg francs.
ENQUIRIES:
Steve Webster - Group Finance Director, Wolseley plc
Telephone 01905 777200
Tony Knox - Financial Dynamics
Telephone 0171 831 3113
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