Travis Perkins buys Wickes

BUILDERS' merchant Travis Perkins has snapped up DIY retail chain Wickes in a ?950m deal that will safeguard the future of the company's 6,300-strong workforce. Travis Perkins will have 912 stores following the tie-up, adding the 172 Wickes outlets to its existing 740 depots.

The company said the acquisition would give it a 'platform for growth' and push it into the number two slot behind B&Q, the DIY stores group owned by Kingfisher plc.

The enlarged group will have around 10% of the UK's ?28.5bn DIY market, compared to B&Q which has 14% of the market.

Travis Perkins chief executive Frank McKay said he did not envisage closing any stores or making any redundancies. 'We've been looking at Wickes for some time. It fits well into our strategy and will strengthen our existing builders' merchant business. Wickes has a similar customer profile to our own business and together the two will be a major force in the UK DIY market,' he said.

Travis Perkins is financing the deal through a new ?1.2bn borrowing facility, while it is also raising ?75m through a placing of shares. The group has already identified ?17.5m of cost savings next year rising to ?35m a year thereafter. These will be achieved largely through its stronger purchasing power and streamlined distribution.

Wickes was at the centre of fraud enquiries in the late 1990s after suspicions about the company's accounts. In November 1996 the Serious Fraud Office began an investigation into suspected accounting irregularities.

In 1999 five former senior executives were charged with making false statements and fraudulent trading. One was found to have no case to answer and all the others were subsequently acquitted at their trial.