Ferguson Said to Begin Sale of U.K. Plumbing Unit Wolseley
(Bloomberg) -- Ferguson Plc has kicked off a sale of its U.K. business as part of efforts by the plumbing-equipment maker to focus on its North America operations, according to people familiar with the matter.
The distributor of pipes, faucets and sinks is working with a financial adviser on the sale of its Wolseley brand, which could fetch about 500 million pounds ($654 million), the people said, asking not to be identified as the matter is private.
Wolseley is generating interest from private equity firms as well as some strategic bidders, according to the people. A winner is likely to be chosen by the beginning of 2021, though there’s no certainty that negotiations will lead to a sale, the people said.
A representative for Ferguson and Wolseley declined to comment.
Shares of Ferguson were 0.3% down at 10:01 a.m. in London trading on Wednesday, giving the company a market value of 18.3 billion pounds.
Ferguson said last year that it planned to split off its U.K. operations after pressure from activist investor Nelson Peltz, whose Trian Fund Management LP owns more than 5% of the company. Ferguson announced in September that it’s also assessing other separation options for Wolseley.
Wolseley sells plumbing, heating, cooling, drainage and mechanical supplies to tradespeople in the U.K. The company has been battling falling revenue and saw sales drop 14% to around 1.5 billion pounds in its last fiscal year, according to Ferguson’s website.
Still, some building suppliers have benefited from resilient demand amid Covid-related lockdowns this year, as homeowners use the time to fix up their houses, one of the people said. Shares of Ferguson are up more than 19% this year.
Separating Wolseley would unravel a combination conceived in the 1980s when the U.K. company acquired Ferguson in its first overseas investment. Since then, the U.S. operation has come to dominate a business established in 1887 as a supplier of sheep-shearing equipment.
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