Wolseley agreed to dispose of its U.S. Stock Building Supply business through a deal with private-equity Gores Group LLC. Gores Group will take a majority stake of 51% in the struggling division in exchange for Wolseley stock. Wolseley shares rose 8.5% on news of the deal for Stock Building, which has entered bankruptcy proceedings.

“I am pleased we have partnered with The Gores Group to create a solution that will allow Wolseley to exit Stock,” saidChip Hornsby, Group Chief Executive of Wolseley, in a statement. “This is in line with our stated strategy and we believe is in the best interests of the business and the Group’s shareholders, customers and employees. In particular, the transaction allows Wolseley shareholders to participate in the long-term value potential of the business while strengthening the Group’s financial position. A Chapter 11 pre-packaged reorganization is a frequently used procedure to sell and recapitalize businesses in the U.S. and should enable an orderly transaction while honoring our commitments to our trading partners.”


Source:Wolseley