U.K.-based plumbing distributor Wolseley, and Ferguson parent company, is considering selling Stock Building Supply, its building materials arm in the United States with roughly 300 branches.
Wolseley Chief Executive Chip Hornsby
announced recently that he expects the new residential market to get worse
before it gets better, and that "riding out the storm is not an option for
us," according to
Modern Distribution Management.
With cost-cutting at its end, Hornsby
acknowledged that further large-scale reduction of Stock “will inevitably eat
into the infrastructure of the business." According to recent reports,
Stock lost about $227 million (USD).
Potential buyers are currently educated
guesses. Private equity firms may see an attraction for Stock as a long-term
investment opportunity. With credit markets as they stand, however, larger
deals are not being favored.
ProBuild Holdings is among the most likely acquirer for Stock, “as the
relatively new holding company has been a surprisingly active acquirer in the
space in the past two years, despite the residential housing downturn.” Recent
ProBuild purchases include HD Supply's Lumber and Building Materials assets.
Hornsby says the company will
announce more details and will possibly have a decision in November at its
Wolseley Considers Selling Stock Building Supply
September 29, 2008