Wolseley explores options for Stock

Wolseley announced early Friday morning that a process to identify a joint venture partner for Stock Building Supply is underway. A number of third parties have recently expressed an interest in the possibility of acquiring all or part of the Stock business, according to the announcement.

The decline in housing starts, coupled with a continued decline in lumber prices have forced Wolseley’s hand, spurring the decision to pursue a sale or joint venture -- "or to dispose of or otherwise exit Stock Building Supply, by Aug. 1, 2009," Wolseley said Friday.

“We are working very closely with Wolseley to identify potential partners that can help Stock Building Supply grow when the market recovers,” said Stock Building Supply president Joe Appelmann. “Our business model has fundamental differences from the remainder of Wolseley’s portfolio, and in these economic times it makes sense to explore other options.”

Last October Stock announced an expansive cost reduction program and a significant restructuring plan to position the business in markets that will be strongest on recovery.

“We have worked diligently to position the business so that it will be ready to take best advantage of the upturn -- which we know will come,” said Appelmann. “We continue to operate in the highly cyclical sector of new residential construction in the U.S., but we remain committed to this market. It’s a part of who we are; it’s in our DNA.”

Stock Building Supply, formerly Carolina Holdings, was formed in 1986 by Wolseley’s purchase of Carolina Builders. In 2006 the company announced sales of $5.3 billion. The company has been hurt by the housing downturn. 

“We are confident that we can conclude a deal in the best interests of Stock Building Supply and Wolseley’s shareholders,” said Chip Hornsby, group chief executive for Wolseley. “Indeed, our preference is to structure a deal that enables our associates and shareholders to benefit in the long-term potential of the business, such as a joint venture.”