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Apax and Duke Street sell Wickes

Apax and Duke Street Capital company Focus Wickes, the second largest DIY retailer in the UK, has sold its Wickes division to builders merchants Travis Perkins for a cash consideration of £950m. The transaction expects to close in February 2005 following shareholder approval and receipt of OFT clearance,

A number of trade and financial buyers were in the running for the company, and it was reported that both Wolseley, another UK building materials suppliers, and Saint Gobain, the French glass group, were interested in the purchase.

Focus Wickes expects to use a part of the proceeds to redeem the £190m 10% mezzanine notes due 2011 and the €140m 9.25% mezzanine notes due 2011 issued by Focus Wickes (Finance) plc.

Duke Street invested in Focus in 1988 when it backed an MBO with a £400,000 investment. It currently holds a 57% share, investing from Hambro European Ventures III and Duke Street Capital IV.

Wickes was acquired in a hostile takeover for £323m in September 2000, and Duke Street announced in early 2002 that it planned to float the re-named Focus Wickes at a valuation of between £1.2bn and £1.5bn. The plans were eventually scrapped due to the nervousness of the market and the company underwent a £660m recapitalisation in November 2002. It was at this time that Apax Europe V paid £120m for a 28% stake. The recap generated proceeds of over £340m for Duke Street’s shareholders.

Wickes operates 172 outlets catering to small contractors and serious do-it-yourself customers. It had sales of £911m in the year to October 31, 2004, with an estimated underlying EBITDA at £75.8m.

Following the disposal of Wickes, Focus Wickes will be re-named Focus. Focus, which specialises in light home-improvement for the broader consumer market, operates from 256 stores and generated total sales of £828m in the fiscal year ending 31 October 2004.

Following the sale of Wickes, Bill Archer will continue as executive chairman of the Focus business. Geoff Wilson will also continue as deputy chairman and Steve Johnson will be CEO of the business.