Travis Perkins plc has broken into the DIY market with the proposed £950m acquisition of Wickes Ltd.
Announcing the news on December 16, Travis Perkins also declared a placing of five million new ordinary shares, representing 4.4% of the current issued share capital.
The placing will raise £75m and Travis Perkins has also arranged a new bank facility of £1.2bn to provide the financial flexibility to pursue bolt-on acquisitions and brownfield investments.
The acquisition is waiting on Travis Perkins shareholder approval in January.
Sixty-five per cent of Wickes’ customers are tradesmen or serious DIY enthusiasts, similar to Travis Perkins’ own customer base, and the acquisition is set to strengthen Travis Perkins’ existing builders’ merchant business.
It is forecast that substantial synergies will be realised, estimated at £17.5m in 2005 and rising to £35m a year after that, generated from buying, distribution and process streamlining.
Wickes is one of the UK’s largest DIY retailers, operating from 172 stores, but Travis Perkins believes there is considerable potential for extension of the network.
The product portfolio is similar to Travis Perkins in heavy building materials, timber and forest products, and plumbing and heating.
