Wolseley sells Brandon to private equity in £43m deal

Plumb Center parent Wolseley bought the listed company for 71.9m four years ago and merged it with its existing tool hire division.

However, the stalled construction market saw Brandon Hire suffer a difficult two years, forcing it to shut around 80 branches.

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 slumped into the red during the year to July 31, 2009, and sales have fallen from 80m in that year to around 70m in the 12 months to July 31 this year. However, it is expected to report trading profits of around 4m in the past financial year after cost-cutting efforts.

Rutland agreed to snap up the 177-strong chain, which employs around 960 staff across the UK. Its network includes sites in York, Sheffield, Leeds, Hull and Doncaster.

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.

Mr Smith said: "The Brandon management team are delighted to be working with Rutland who we see as an ideal investor for this type of situation. Together we are committed to taking the business to a leading position in the sector and continuing to improve performance."

Wolseley is disposing of net assets of about 35m.

Mr Meakins said: "We are disposing of the business in line with Wolseley's stated strategy of focusing on our growth businesses and those with synergies.

"Rutland Partners' investment in Brandon Hire demonstrates their confidence in the business and we wish them every success as they continue to develop the business for the benefit of its staff and customers."