Wolseley gains key foothold in electrical market

Materials firm Wolseley has bought UK plumbing, heating and electrical supplier William Wilson for £81m, it was announced today.

The firm acquired William Wilson yesterday from 3i and a large number of individuals and trusts, and provides Wolseley UK with a key foothold in the electrical market.

The acquisition follows Wolseley's strategy of expanding its European distribution operations into related construction materials. Since the beginning of August, Wolsely has acquired a total of 11 distribution businesses in Europe and North America for £317m.

The 11 acquisitions are expected to add approximately £462m to group turnover in a full year. Goodwill related to these acquisitions is estimated to be around £220m.

William Wilson has 600 employees and operates from a network of 45 trading locations in Scotland and the North of England. It is organised into two specialist divisions. The Plumbing and Heating Division, which accounted for 60% of turnover for the year ended 31 March 2005, has 20 locations and includes Scotland's largest bathroom showroom network with a total of ten outlets. The Electrical Wholesale Division has a network of 25 locations and accounted for 40% of the turnover for the same period.

Many of William Wilson's suppliers in its Plumbing and Heating Division are common to Wolseley UK's supplier base and this is expected to create opportunities for purchasing synergies. It is also expected that supply chain efficiencies will be created by utilising existing distribution centres.

For the year ended 31 March 2005, it reported sales of £104.7m and a normalised profit before interest and goodwill of £4m. Gross assets at that date were £42m.

Charlie Banks, Group Chief Executive of Wolseley said he was delighted to announce this acquisition.

He said: “As well as significantly expanding our operations in the North of England and Scotland, the acquisition of William Wilson enables us to develop our presence in these regions and to expand the range of construction products we distribute to now include electrical supplies. We remain committed to growing the business at double-digit rates through a combination of organic and acquisition growth.'