Casting a wider net.
Travis Perkins bids for Wolseley units
Published: 06 August, 2010
Travis will bid for the Build Center and Encon Insulation chains, said Travis Perkins' chief executive Geoff Cooper. "Wolseley has said it may sell some businesses if they're underperforming and we'd be interested in some of them," Mr Cooper said.
"If we had the opportunity, for example, to bring Build Center into our portfolio we could make some fairly significant improvements and bring them back to profitability."
Travis' agreed bid to acquire BSS for £553 will take Travis's 15% share of the merchanting market to 20%, putting it ahead of Wolseley on 19% and Saint-Gobain's Jewson unit on 18%, according to Mr Cooper. He said Travis is most interested in buying the heavy building materials and drylining and insulation stores of Wolseley. Wolseley's chief executive Ian Meakins said last March that it might sell 19 businesses with sales totalling £2.7bn.
Mr Cooper said: "We've got good scale in some of those markets and adding a bit more scale would give us very good buying gains, so they're potentially very good transactions." Travis has 962 merchant stores including 624 own-brand branches. BSS, the UK's largest plumbing and heating chain, will add more than 300 following the takeover agreement on 5 July. Wolseley Build Center has about 150 outlets although Travis wants only some of these, he added.
Mr Cooper said it is not clear when the Wolseley assets will become available, and Wolseley may seek to improve the stores before trying to sell them.
Mr Meakins said in March that he won't 'dally' in disposing of unprofitable units, while adding that a decision on some of the businesses may take "a couple of years." Mr Cooper said Travis is unlikely to target purchases in mainland Europe in the near future and that forays from other UK builders' merchants have suffered because of a lack of understanding of foreign markets.
Travis said in 2008, before the credit crunch and subsequent recession, that it was keeping a "watching brief" on Europe and might expand there.