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Ferguson Plc, plans to spin off its UK operations as a separate company and focus on its North American operations.
The distributor also announced that John Martin, group CEO since 2016, will step down in November and be replaced by Kevin Murphy the CEO of Ferguson’s U.S. operations.
The news appears to be a victory for activist investor Nelson Pletz, whose hedge fund, Trian Partners, acquired a 6 percent stake in Ferguson last June to become one of the distributor’s largest shareholders.
At the time, Trian described Ferguson as “an attractive business that trades at a discount to comparable U.S. peers.”
In the company’s last full financial year, 80 percent of total sales and more than 90 percent of profits came from the U.S., with the UK providing 12 percent and 5 percent, respectively.
Martin said the demerger of UK-based Wolseley, the original core of the business, from Ferguson will enable both business “to focus on accelerating the execution of their independent plans, providing clear investment propositions for each business”.
Murphy joined Ferguson in 1999 following the acquisition of his family’s business, Midwest Pipe and Supply. He served as chief operation officer for 10 years prior to his appointment as CEO in 2017.