Caradon sells plumbing division for £422m cash

Caradon, one of the UK's best performing building stocks this year, yesterday said it had sold its plumbing businesses to HSBC Private Equity in a £422m cash deal to help fund further acquisitions.

Caradon, one of the UK's best performing building stocks this year, yesterday said it had sold its plumbing businesses to HSBC Private Equity in a £422m cash deal to help fund further acquisitions.

The company, which has seen its share price rise 21 per cent since January, also said it will change its name to Novar. It operates Novar Electronics, a building controls company in the US.

"The funds will initially be used to pay down debt but then we'll ... buy companies operating in the fast-growing intelligent building market [electric cabling and security services],'' said Caradon chief executive, Jurgen Hintz, adding the company was not in talks to make further purchases. Its shares closed up 4p to 187.5p.

Caradon is focussing on its operations in security printing, aluminium extrusions and electric cabling.

HSBC will gain Caradon's name and brands, including Mira Showers, Stelrad, Henrad Radiators, Ideal Boilers, and Twyford Bathrooms. Caradon's plumbing division, which is being sold debt-free, reported an operating profit of £35.2m on sales of £338.3m in 1999. Caradon will make a pre-tax profit of about £134m on the sale, and will use the funds to slash debt to about £60m, from £479m.