Wolseley Acquires Four Distributors
Stock Building Supply acquired Wenco Distributors of Texas for an approximate cash consideration, including debt, of $45.8 million (U.S.). Wenco, which distributes millwork, lumber and building materials to professional contractors, operates from eight facilities throughout Texas. This acquisition continues Stock's strategy of increased focus on value-added activities that represent over 60% of Wenco's sales. Wenco reported sales of $143.7 million (U.S.) in the year ended Dec. 31, 2002.
Wolseley Canada acquired Meridian Specialities Inc. for a cash consideration, including debt, of about $9.5 million (U.S.). Meridian supplies industrial valves to the oil and gas, pulp mills and mining sectors in western Canada and had sales of $31.9 million (U.S.) in the year ended Feb. 28, 2002.
Ferguson Enterprises acquired Triangle Supply Co., Inc. for an approximate cash consideration, including debt, of $3.4 million (U.S.) Triangle is a wholesaler-distributor of plumbing supplies, primarily to professional contractors in the Dallas area.
In addition, Ferguson Enterprises has acquired certain assets of the Corona California branch of York International Corp. for an approximate cash consideration, including debt, of $1.8 million (U.S.). York International Corp. is a major supplier of heating and air conditioning equipment in the United States and Ferguson is its distributor in southern California.
Together, Triangle and York Corona had sales of about $18.8 million (U.S.) in the year ended Dec. 31, 2002.
These acquisitions bring Wolseley's total acquisition cost, including debt acquired, for the six months ending Jan. 31, 2003, to about $91.2 million (U.S.). In total, the 11 acquisitions completed in the first six months of the year are expected to add about $259.8 million (U.S.) to group turnover in a full year.
In other news, Wolseley issued its regular trading statement update prior to entering into the closed period. Its interim results for the half year ended Jan. 31 are expected to be released March 18.
The company reported that in local currency for the five months to Dec. 31, sales in its U.S. plumbing operations were up 7% vs. the prior year, and sales in Canada were up by more than 13%.
Market conditions remained mixed in both the United States and Canada due to variations in regional economies, the company said. Housing and remodeling activity held up well. The industrial and commercial sector remained the weakest and was not expected to show any major improvement until late in the current financial year, although the company said there were signs the bottom had been reached.
U.S. plumbing and heating distribution operations continued to derive benefits from the integration of Westburne's U.S. business and Familian Northwest into Ferguson, the company said. Increased throughput at the distribution centers resulted in increased gross margins for the first five months. This, combined with careful cost controls, resulted in improved net margin, Wolseley said.