CD&R Acquires Wolseley UK from Ferguson

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CD&R Acquires Wolseley UK from Ferguson

Private equity firm strikes again with the $420 million purchase of Ferguson’s UK-based heating and plumbing distribution business.
Wolseley UK

Ferguson PLC on Monday said it has agreed to sell Wolseley UK — its UK-based heating and plumbing distribution business — to the private equity firm Clayton, Dubilier & Rice for £308 million (US$417.5 million).

In the year ended July 31, 2020, Wolseley UK generated revenue of $1.9 billion and underlying trading profit of $8 million on a pre-IFRS 16 basis.

“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,” said Kevin Murphy, CEO of Ferguson. “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.”

As CD&R reported in a separate press release, Wolseley will become an independent company wholly owned by CD&R funds and management.

Bruno Deschamps, operating adviser to CD&R funds and former COO of Ecolab, will serve as chairman of Wolseley upon the close of the transaction, expected in the first quarter of 2021. Wolseley is led by CEO Simon Oakland, who will continue in that role.

“We believe that Wolseley, as a freestanding enterprise, can accelerate growth, enhance customer service, and create rewarding career opportunities for our colleagues,” said Oakland. “CD&R has extensive experience supporting branch-based networks like ours and shares our vision to continue to build Wolseley’s entrepreneurial culture and relentless focus on customer satisfaction.”

“Wolseley is a market-leading distribution platform in an industry where CD&R has extensive prior experience and success, and we believe it represents a compelling opportunity to invest at an inflection point and work with a highly credible management team to drive operating improvements and accretive M&A,” said CD&R Partner Christian Rochat.

“Providing strategic capital to corporate, family, and founder owned businesses has been a central tenet of CD&R’s strategy for more than forty years,” David Novak, CD&R Co-President, observed.  “The disruption of the past ten months has demonstrated the constructive role that we can play providing both capital and operating capabilities to support good businesses. We have a great appreciation for the strengths of Wolseley and look forward to partnering with the leadership team.”

The transaction represents the 12th building products and industrial distribution investment completed by CD&R over the last decade. Rothschild & Co is acting as financial adviser to Ferguson plc in relation to the disposal. Clifford Chance and Debevoise & Plimpton LLP served as CD&R’s legal advisers in the transaction.

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