Travis Perkins pays £950m for builders' merchant Wickes

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The Independent Online

Duke Street Capital, the private equity group that controls Focus Wickes, scooped a £330m windfall yesterday after selling the group's building materials arm to Travis Perkins for £950m.

Duke Street Capital, the private equity group that controls Focus Wickes, scooped a £330m windfall yesterday after selling the group's building materials arm to Travis Perkins for £950m.

Adding Wickes' 172 stores to its own 740 depots transforms Travis Perkins, catapulting it into second place in the UK's booming do-it-yourself market behind B&Q.

The deal carves Focus Wickes in half, 14 years after Focus Do It All acquired Wickes for £325m after a protracted struggle. Bill Archer, the chairman of Focus Wickes, will get £72m for his 12 per cent stake, while Apax Partners will receive £180m for its 30 per cent shareholding. Mr Archer, who built up the business, will continue as executive chairman of Focus, which is aimed at the softer end of the DIY market.

Focus Wickes will use £350m to pay down existing debt, leaving £600m to be shared between the group's owners. The management will split £18m for its 3 per cent stake.

Duke Street, which has backed Mr Archer since 1988, has invested a total of £200m in Focus Wickes, which it more than recouped in 2002 when it recapitalised the business, selling a stake to Apax Partners after it pulled an attempted flotation. Edmund Truell, Duke Street's chairman, said it had "no immediate intention" of selling Focus, which has 256 stores across the UK. He added: "We have a strategic opportunity to build further value by actively investing in new stores and refits within the existing estate."

Shares in Travis Perkins shot up 9 per cent to 1722p on confirmation of the deal. The group beat off competition from Wolseley and a host of private equity players to secure Wickes. It is funding the deal via new bank facilities and a share issue that raised £76.5m by placing 5 million shares at 1,530p each.

Travis Perkins said the deal would enhance earnings in 2005. By combining the group's buying and distribution operations it expects to save £17.5m next year and £35m a year thereafter. It is acquiring the business debt free. Wickes generated underlying profit of £75.8m on sales of £911m in the year to end-October.

Tim Stevenson, the chairman of Travis Perkins, said the deal would enable the group to penetrate the growing DIY market, while boosting its offering in the merchants market. The group bought the City Plumbing Supplies chain in 2002 and 101 Keyline Builders Merchants stores in 1999.

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