LONDON: Investors have welcomed Wolseley's sale of its UK Build Center chain and the French plumbing and heating merchant, Brossette, to Jewson.
The disposals are the latest in an asset sale that has seen Wolseley offload underperforming parts of its business to raise cash and repay debt. It flagged both firms several months ago as units it wished to divest.
The two businesses each made little profit despite generating close to £1bn in combined revenues.
Wolseley said Build Center provided £4m trading profit on revenues of £294m in the 11 months to the end of June while Brossette made £5m profit on revenues of £590m in the same time.
Analysts welcomed the sale, saying it left Wolseley with just £100m net debt and positioned it well to ramp up its investment for growth in future. Evolution Securities analyst Adrian Kearsey said Wolseley negotiated a good price for the two disposals, though regulatory approvals needed meant they could take months to complete.
Shore Capital analyst Gavin Jago also said the sales put an end to speculation that Travis Perkins had hopes of buying the businesses.
Travis Perkins has been linked to bids for Wolseley's assets for the past year, in a period of industry consolidation that included Travis Perkins' £558m purchase of BSS in December.
Wolseley will still have to manage a restructuring process to cut unrecovered overheads of £1m a month. It also expects to pay £15m restructuring costs.
