Ferguson plc has announced that it’s entered into an agreement to sell Wolseley UK to Clayton, Dubilier & Rice, for net cash consideration of approximately £308 million (c. $420 million).
The transaction of the UK based heating and plumbing distribution business is expected to be completed at the end of January 2021.
Founded in 1978, Clayton, Dubilier & Rice is a private investment firm with a strategy predicated on building stronger, more profitable businesses. Since inception, CD&R has managed the investment of more than $30 billion in 95 companies with an aggregate transaction value of more than $150 billion. The Firm has offices in New York and London. CD&R has been investing in Europe for more than 20 years, acquiring 19 businesses representing more than $6 billion of capital.
In the year ended July 31, 2020 Wolseley UK generated revenue of $1,879 million and underlying trading profit of $8 million on a pre-IFRS 16 basis. Gross assets at July 31, 2020 were $1,093 million. Future responsibility for the UK defined benefit pension scheme will be retained within the Ferguson plc Group. At July 31, 2020 the net pension liability was $27 million on an IAS 19 basis. The Wolseley UK business being sold will retain no ongoing liabilities in relation to the UK defined benefit pension scheme. Excluding the net pension liability, the net operating assets of Wolseley UK at July 31, 2020 were $378 million.
Kevin Murphy, Chief Executive of Ferguson, commented:
“Wolseley is a leading heating and plumbing distribution business in the UK and we are confident the business will benefit from working with its new owners, Clayton, Dubilier & Rice who will develop the business further by focusing on continued opportunities in the industry. We’d like to thank all our associates for their tireless hard work while they have been part of the Group, especially recently through the COVID-19 pandemic. We wish them all the very best for the future.
“The transaction further simplifies the Group and allows us to focus entirely on investing in and developing our business across North America where we have the greatest opportunities for profitable growth.”