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[October 2000]
Caradon plc to sell Plumbing for £442m, and change name
Caradon plc has announced that it has agreed to sell all its Plumbing Businesses ("Plumbing") to HSBC Private Equity for a total cash consideration of £442 million on a debt-free basis, subject only to the approval of Caradon shareholders and normal competition clearances.
The businesses to be divested include leading brands in the UK and Europe, such as Mira Showers, Stelrad and Henrad Radiators, Ideal Boilers and Twyford Bathrooms. In 1999, Plumbing had turnover of £338.3 million and operating profit of £35.2 million. As of 30 June 2000 Plumbing had net assets of £169.5 million, and goodwill previously written off to reserves of £132m. The proceeds from the disposal will serve to reduce Group debt. No material capital gains tax charge is expected to arise in respect of this sale.
Jürgen Hintz, Group Chief Executive of Caradon plc, said:
"This disposal marks a milestone in the transformation of the Group, from low growth industrial businesses into higher growth markets with significant technology and customer solutions dimensions, to support the creation of further shareholder value.
"The agreed price realises about £1 per Caradon share for the Plumbing businesses, which have been contributing less than a quarter of the Group's profits".
Change of Name
Subject to shareholder approval, Caradon will change its name to "Novar plc". This new name reflects the continued transformation of the Group providing enhanced customer solutions and increasing technology in the markets we serve. Novar is an established name within the Group in North America through Novar Electronics Corporation, our US building controls company.
In the past, the Caradon name has always been most closely associated with the plumbing businesses that are being sold. We have therefore agreed that the purchaser will be entitled to continue to use the Caradon name in the plumbing markets.
Extraordinary General Meeting
The disposal and name change are subject to shareholder approval. A circular, containing details of the transaction and notice of an Extraordinary General Meeting, expected to be held in November, will be posted to shareholders shortly.
Current Trading and Prospects
The Group continues to trade satisfactorily, in line with management's expectations for the year. The proposed disposal strengthens the Group financially, enabling
ENDS