By Bob Miodonski of contractor’s staff
Newport News, Va. – Plumbing wholesaling giant Ferguson Enterprises just got bigger. Ferguson’s British parent company, Wolseley plc, announced in May that it was acquiring the 114 Westburne Supply units of Rexel SA in the United States for $358 million (U.S.).
The cash transaction, which should be completed by late June, also includes Rexel’s Canadian plumbing, industrial and hvac operations: Westburne Plumbing & Waterworks, Westburne Refrigeration & hvac and Westburne Industrial Products. Paris-based Rexel acquired Westburne in September 2000.
The U.S. operations of Canadian-based Westburne will be fully integrated into Wolseley’s existing U.S. plumbing operations over the next two years, according to a statement from Wolseley. The company said it hopes the integration will bring about synergies and cost savings, which are expected to substantially improve the performance of the Westburne’s U.S. business by the third year.
Ferguson’s newly appointed president and ceo Chip Hornsby will retain overall responsibility for Wolseley’s combined plumbing operations in the United States. Earlier in May, Hornsby took over from former Ferguson ceo Charlie Banks, who was promoted to group chief executive.
Some of the newly acquired supply houses will retain their names while others will be changed, Ferguson cfo Tom Mitchell told Contractor.
"It probably will be a combination of things," he said. "We’re working through some of those issues right now."
Contractors may see more than just a name change, he added.
"We hope that with Ferguson’s capital and distribution network to improve the high level of service that Westburne’s customers have come to expect," Mitchell said.
Others said the impact on Westburne’s U.S. customers should be minimal.
"This will have little or no effect on U.S. contractors; it will be business as usual," said Ed Hardison, president of the Canadian Institute of Plumbing & Heating, a trade association. "Wolseley bought an excellent company at a fair price. It was good for both companies.
"Ferguson has a great track record of understanding distribution, training its staff well and providing excellent service to its customers. It has grown because of good staff and good customers."
Overall, Canadian-based Westburne has more than 3,000 employees in 313 locations. Westburne is the No. 2 plumbing wholesaler in Canada and is No. 3 in the United States, according to industry sources. Overall, Westburne operations did a total of $928 million (U.S.) in sales in 2000. U.S. plumbing operations accounted for $438 million (U.S.).
Ferguson has U.S. sales of more than $3 billion a year with 479 branch locations.
"We are delighted to announce this acquisition, which enables us to enter the Canadian market and to expand our operations in the United States," Banks said. "Westburne is a quality business with a good track record. After some initial restructuring in the United States over the next two years, it should enable us to create additional growth opportunities in North America. We will continue to be alert to opportunities to expand our international representation still further."