Wolseley plans to continue pursuing a number of acquisitions at "realistic prices," Banks said, with some expected to be completed by year-end. He said the company would spend on average $285 million (U.S.) per year for bolt-on acquisitions.
Prior to the conference call, Banks told UK stock analysts that the company is "thinking big" and is excited that companies like Hughes Supply and Watsco are currently rated lower than they deserve, according to a Reuters report. Reuters said Banks hasn't made up his mind about the next target, but UK analysts said Wolseley could do a billion-dollar cash acquisition.
"Multi-product building components distributors are rated more highly by the market in the United States than builders' merchants in the UK," said David Taylor, an analyst with Teather & Greenwood, a British brokerage firm. "North America is increasingly dominant and accounted for 68% of sales and 63% of Wolseley's earnings before interest, taxes and amortization for the period. Given the pattern of future acquisitions, the centre of gravity of the group is likely to shift further across the Atlantic. Wolseley makes no secret of its intention of playing a consolidator role in the USA, but whether Hughes Supply figures in its thinking I cannot know."
