Wolseley pays pounds 56m for Swedish firm

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The Independent Online
WOLSELEY, the Plumb Centre builders' merchants chain, has bought a Swedish maker of oil and gas burners for pounds 56m.

Wolseley placed 11 million shares - equivalent to 5 per cent of the company's existing share capital - to pay for the acquisition.

The placing, pitched at 565p, was at a 4 per cent discount to yesterday's opening price of 588p.

One dealer said the shares offered for placement among institutions were snapped up in minutes. The shares fell 4p during the day.

The acquisition should be large enough to make Wolseley eligible for inclusion among the companies that constitute the FT-SE 100 index. Jeremy Lancaster, the chairman, is thought to hold an ambition to win Footsie status. The list is next revised in early June.

Wolseley is buying Enertech, a subsidiary of one of Sweden's biggest industrial companies, Trelleborg. Enertech is based in Llungby and has smaller operations in Belgium and Germany.

Enertech specialises in small burners designed for domestic use. It will be added to Wolseley's Nu-Way operation, which makes mainly larger burners. Wolseley said it will create the biggest burner-making operation in Europe.

Wolseley is paying pounds 44.5m for the business and raising an additional pounds 12m to pay off Enertech's debt.

The price paid is eight times Enertech's operating profit of pounds 7m in the year to December 1992.

Wolseley said yesterday's deal would have no effect on gearing.

Enertech forms part of a concerted drive by Wolseley to expand its Continental European operations.

In February last year it paid pounds 95m for Brossette, the French building materials supplier. As well as the Plumb Centres in the UK it has a big string of builders' merchants in North America.

At current levels the stock is not far off its all-time high of 604p achieved last week.

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