Wolseley agreed to dispose of its
U.S. Stock Building Supply business through a deal with private-equity Gores
Group LLC. Gores Group will take a majority stake of 51% in the struggling
division in exchange for Wolseley stock. Wolseley shares rose 8.5% on news of
the deal for Stock Building, which has entered bankruptcy proceedings.
“I am pleased we
have partnered with The Gores Group to create a solution that will allow
Wolseley to exit Stock,” saidChip Hornsby, Group
Chief Executive of Wolseley, in a statement. “This is in line with our stated strategy and we believe is in the best
interests of the business and the Group’s shareholders, customers and
employees. In particular, the transaction allows Wolseley shareholders to
participate in the long-term value potential of the business while
strengthening the Group’s financial position. A Chapter 11 pre-packaged
reorganization is a frequently used procedure to sell and recapitalize
businesses in the U.S. and should enable an orderly transaction while honoring
our commitments to our trading partners.”
Source:Wolseley