28.03.2006

Wolseley buys Brandon

The directors of Brandon Plc have recommended a cash offer from Wolseley plc, to take over the Bristol based rental company. The offer is 212 pence a share, a 15 percent premium over yesterday’s closing price. Making the company worth £71.9 million.

Brandon had announced back in December that it had given the senior management team led by Charles Skinner, approval to investigate a management buy out. At that time the company’s shares were £1.53p, a variation of 38 percent in barely three months.
See story December 30th
Brandon had revenues last year of over £57 million and has 143 locations in the UK to which Wolseley will add a further 135 Hire Center branches. Indications are that the Wolseley will look for merge the businesses.


The official purchase will be made by a newly formed wholly owned subsidiary dubbed Wolseley Bristol, which has been set up specifically to make this acquisition. The directors represent over 36 percent of the outstanding share capital, given the value of the deal obtaining the agreement of the other shareholders ought to be a formality.


A joint statement form the two companies said, “The acquisition of Brandon Hire will enable the combined tool hire business to enhance revenue growth and generate cost synergies through a combined product offering and the sharing of commercial, operational and
logistical best practices”.


Charles Banks, chief executive officer of Wolseley,
said: "We are delighted to have reached agreement with the Board of Brandon Hire. The transaction represents a further step in our strategy to broaden our product and geographic reach, by enhancing our hire offering across the UK. We look forward to working with the Brandon Hire team to realise the potential that exists to grow the combined business, through sharing best practice and increased customer benefits"

John Laycock, the Brandon chairman, said: "The board of Brandon Hire is pleased to accept this offer from Wolseley plc. It not only represents excellent value to shareholders, but also secures a strong future for the company and its employees as part of a group with a proven track
record of developing its acquisitions."