Acquisitive building materials giant Wolseley has secured its biggest ever deal, with the £1.35bn purchase of Danish rival DT Group from CVC Capital Partners.
Wolseley has already made £900m of acquisitions this year, but has been threatening to pull off a single major buy since losing out on Focus Wickes to Travis Perkins in 2004. Travis Perkins eventually paid £950m.
DT Group will lead Wolseley’s push into the Scandinavian market, as it has 256 operations and 8000 employees across Norway, Denmark, Finland and Sweden.
Banks said: “This acquisition gives us a major presence in the Nordic region for the first time and significantly broadens our European reach. Already a strong performer, DT Group enhances our position in building materials in Europe and provides a platform for future growth.”
DT Group reported a revenue of £1.6bn in its last audited accounts, 80% of which comes from builders merchants sales to trade professionals. Its president and chief executive, Steen Weirsoe, will continue to be involved in the business as part of Wolseley’s European division, led by Rob Marchbank.
Wolseley hopes to make additional pre-tax earnings at DT Group of more than 2% a year, by initiatives such as reducing working capital and making IT cost savings.
Regulatory approval for the deal is likely to take two months, and so DT Group will not contribute to Wolseley’s results until the next financial year, which starts on 1 August.
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