Travis Perkins to buy DIY group Wickes for £950m …

The builders merchant sector is set for consolidation after Travis Perkins’ offer to buy DIY retail chain Wickes for £950m was accepted.

Travis Perkins, which has 740 stores in the UK, plans to fund the purchase by placing 5 million new shares. It expects this to raise at least £750m.

The deal will give the firm 10% of the DIY and builders merchant market, which puts it in second position behind B&Q, which has a 15% share.

Travis, which is advised by HSBC, is buying the business from private equity firms Apax Partners and Duke Street Capital. The latter will retain the Focus element of the Wickes group, which comprises stores in smaller towns aimed at less serious DIY enthusiasts.

Travis, which beat Saint-Gobain and Wolseley to the deal, will retain the Wickes brand.

The deal is subject to the approval of Travis Perkins’ shareholders at an extraordinary general meeting to be held at the end of this month. It is expected to go through without opposition.

About 65% of those who shop at Wickes are tradesmen or serious DIY enthusiasts, which means that they have a similar profile to Travis Perkins’ clients.

Frank McKay, the chief executive of Travis Perkins, said the merger would allow the firm to exploit the growing DIY market.

McKay said the expansion of the DIY market was driven by “the trend towards smaller households, the increased popularity of home improvements and a long-term need to increase housing stock.”

He added that the deal had wider implications for the industry. “There has been consolidation among contractors and housebuilders and it does simplify processes and add to further savings and a greater focus,” he said.

McKay plans to extend the Wickes network areas beyond its core market in south-east England.

He said the acquisition of Wickes could act as a springboard to international expansion but that this was not an immediate plan.

McKay will be replaced as Travis Perkins chief executive on 1 March by Geoff Cooper, as previously planned. He will stay on to manage the Wickes acquisition until 1 May.

Richard Bird, chief executive of Wickes, will continue to head the business within the larger group.

Travis shares rose 9% (143p) to 1721p when the deal was unveiled.

… while Saint-Gobain gobbles up Swiss firm

French materials producer Saint-Gobain has continued the trend of consolidation among builders merchants by buying Swiss firm Sanitas Troesch for an undisclosed sum.

The acquisition will console Saint-Gobain after it was beaten by Travis Perkins in the battle for the Wickes Group.

Sanitas Troesch is a bathroom and kitchen maker with a €308m (£217m) turnover. It employs more than 720 people in 26 branches in Switzerland. Its sales increased 6.7% last year, fuelled by organic and external expansion.

Saint-Gobain expects the Swiss company to have a positive financial impact on its business by the end of this year.

The acquisition will boost Saint-Gobain’s plan to develop its specialist building distribution lines. It will also strengthen its position in the European bathroom market and provide the group with a platform to grow its other businesses in Switzerland.

Saint-Gobain's building distribution arm is estimated to have achieved sales of €13.6bn (£9.6bn) in 2004. The division has more than 58,000 staff across 3300 outlets in 19 countries.

Saint-Gobain is the biggest building materials distributor in Europe, and its UK brands include Jewson's and Graham's.

Sanitas Troesch was created by the merger of two family-owned businesses in 1991.

The takeover is now subject to the approval of the competition authorities.