Sheffield to buy WMS for 53m pounds: Cash call planned to fund 53m pounds acquisition

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SHEFFIELD Insulations plans to more than double its size with a rights issue and pounds 53m acquisition, writes Tom Stevenson. The deal will see the founding family of the non-executive chairman, Norman Adsett, reduce its stake in the building products distributor from 54 per cent to just over 20 per cent.

The acquisition of WMS, which designs and distributes metal locks and fittings for doors and windows, will be funded by a three-for-two cash call at 135p. Sheffield's shares rose 5p on the news to close yesterday at 176p. Since September they have risen from a low of 76p.

WMS, which estimates the UK market for locks and hinges to be worth about pounds 600m, had planned to float on the stock market this year. Last January it appointed Bill Forrester, Sheffield's managing director, as a non-executive director to advise the group. He recommended selling out to Sheffield instead.

In the year to last August WMS made pre- tax profits of pounds 5m from sales of pounds 27.5m, a 156 per cent improvement, and nearly three times the pounds 1.7m it made in 1990.