Wolseley strikes deal to sell Brandon Hire

Plumb Center parent Wolseley today announced a £43m deal to sell its Bristol-based building tools and equipment firm Brandon Hire.

Private equity firm Rutland Partners has agreed to snap up the 177-strong chain, which employs around 960 staff across the UK.

The move follows a Wolseley-wide review led by chief executive Ian Meakins, which has seen 19 of the group’s underperforming businesses put on a list to improve or sell.

Brandon Hire, which was bought by Wolseley in 2006, is being sold after a difficult past two years for the business, which have seen it shut around 80 branches.

The company slumped into the red during the year to July 31 2009 and sales have fallen from £80 million in that year to around £70m in the 12 months to July 31 this year.

But it is expected to report trading profits of around £4m in the past financial year after cost cutting efforts.

Rutland said Brandon Hire’s management team, led by chief executive Tim Smith, had “done a great job” in getting the firm on the road to recovery.

Nick Morrill, managing partner of Rutland, said: “Brandon has had a difficult couple of years as it was forced to adapt to market conditions, but Tim Smith and his team have done a great job in managing that process.

“Rutland looks forward to helping Brandon continue its recovery in what remains a highly challenging economic environment.”

The management team will remain with the business and are investing in the company alongside Rutland as part of the deal, which is expected to complete by the end of September.

Brandon Hire has more than 50,000 local trade and smaller business accounts, as well as large customer contracts.

Shares in Wolseley, which has operations worldwide, dropped 5% today amid worries over the impact of uncertain economic conditions.

Seymour Pierce analyst Caroline de La Soujeole added: “Today’s announcement does not come as a complete surprise as Mr Meakins had indicated at recent analyst presentations that he would be looking at the performance of individual businesses, selling those that were underperforming and focusing on core markets.

“We expect to see further disposals in due course.”