US building materials giant Stock Building Supply is being spun off by owner Wolseley into a new joint venture company.
Wolseley has signed an agreement with private equity firm the Gores Group to enter the joint venture. Gores will have the majority interest and Wolseley will keep a 49% stake.
Wolseley announced in March that it intended to sell loss-making Stock because of the latter’s high revenue concentration from the beleagured US new housing market, with profitability highly sensitive to the price of lumber.
The move is expected to cost Wolseley “not more than £175m”, to be factored into the group’s results for the year ending July 31, 2009.
“We believe that given Stock’s leadership in the market place, it is well positioned to benefit from a recovery in the sector,” said Gores chairman Alan Gores.
