An acquisition machine
We've been watching the strategies of UK-based Wolseley plc, as it creates a juggernaut in plumbing and heating supplies in both North America and Europe. The company is dedicated to supplying contractors and builders. Most of the expansion has come through acquisitions, and the company has methodically snapped up both manufacturers and suppliers in both markets. The company is also a major, but not dominant player, in building supplies.
Wolseley plc started life in 1887as a sheep-shearing equipment company in Australia. By 1896, it has moved to England and detoured briefly into the auto manufacturing industry. It wasn't until the 1960s when the company had acquired a heating parts maker that the company started to get out of the agricultural sector. In 1982, the company bought Ferguson Enterprises, giving it a large presence in the US distribution market. In the 1990s , the company bought leading plumbing/heating supplies distributors in France, Austria, Switzerland, Hungary, Germany, and the Czech Republic.
By 2000 the company had sold off much of its manufacturing business, to concentrate on selling supplies to contractors. In that defined and profitable area, the company has thrived. It now has sales of $18 billion a year, and has some 4,000 branches in 14 countries, with significant market share in all the countries it is in, ranging from 20% to 10%, enough to be the market leader.
The company has dedicated itself to becoming an acquisition machine. This year, it acquired dozens of companies, most of them small, family run suppliers suppliers, to build an ever larger network in both the US and Europe. Many of the acquisitions are for under a $100 million, but taken together they account for a lot of growth.
Wolesley is not yet at critical mass to dominate its industry, but it certainly counts, both for customers and manufacturers as a key supplier. Every new acquisition extends its industry lead, and makes the company more attractive to investors. That, along with unending growth in both income and profit (thanks partly to the continued North America housing boom) motivate the company to keep growing.
Here are the acquisitions for the year 2005 to date, just to give you an idea of the relentlessness of the company in making deals. A simialr list could be supplied ofr 2004 or 2003.
- L&B Appliances, a major North Carolina appliance dealer
- Canyon Drive Lumber, a Texas-based building materials supplier
- John H. Frischkorn, a Virginia-based industrial pipe distributor
- Seigles', a Chicago-based building supplies chain
- William Wilson, a Scotland-based distributor of heating, plumbing, and electrical supplies
- Encon, the #2 UK-based distributor of insulation materials
- Camellia Valley Supply, a water works supplies company based in California
- HGH Plumbing supplies, a UK-based company
- Centratec, a Belgian heating supplies company
- Sudbuty Valve Fitting & Control, a Canadian industrial valve and instrumentation company
- Park Supply, a Chicago-area heating supply firm
- S & S Fabrication and Supply, a Virginia company specializing in fire protection supplies
- Economy Plumbing & Heating Supply Co., a Philadelphia-based plumbing and heating supplies company
- Endries, Inc., a US chain that manages inventories for plumbing and heating suppliers
- Niklaus Energie- und Gebaudetechnik, a Swiss distributor of plumbing, heating, and insulation supplies
- Full Services Suppliers, a Pennsylvania supplier of maintenance, repair, and operations supplies
- Davidson Industries, an Indiana-based lumber and building materials supplier
- Iser Zauli, an Italian heating and plumbing distributor
- Duval Materiaux de Construction, a French roofing supplier
- J.D. Daddario, a Massachusetts plumbing, heating, and electrical supplier
Mecko's Supply, a North Carolina plumbing and heating supplies
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