Acquisition of DT Group

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Acquisition of DT Group (formerly Danske
Traelast) 24 July 2006
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• Charlie Banks, Group Chief Executive

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TRANSACTION HIGHLIGHTS

• Achieves strategy of expanding operations by
  customer, product and geography
• Significantly strengthens building materials
  footprint in Europe
• Access to all four Nordic countries and the
  platform for future growth
• Market leading positions in building materials
  distribution
• Strong management team with significant industry
  experience and desire to continue with the
  business
• Consideration of 2.0 billion (1.4 billion)
  achieves Wolseleys ROGCE targets and is
  immediately earnings enhancing

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DT GROUP

• Leading building materials distributor in Nordic
  region
• 1 in Denmark (Stark 23) and Sweden (Beijer
  Byggmaterial 10)
• 2 in Finland (Starkki 16)
• Regional leader in Norway (Neumann Bygg 3)
• Market leader in Danish DIY market (Silvan)
• Revenue of 2.4 billion (1.6 billion) split
  approximately 80 builders merchants, 13 DIY
  and 7 wholesale (specialist traders)
• 256 branch network comprising 175 builders
  merchants, 65 DIY stores and 16 wholesale outlets
• Approximately 8,000 employees
• Track record of bolt-on acquisitions to
  supplement organic growth initiatives

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BENEFITS OF ACQUIRING DT GROUP

• Attractive market dynamics around 30 billion
  spent annually on construction materials in
  Nordic region
• Fragmented market provides opportunities for
  future organic growth and value creation from
  bolt on acquisitions DT has less than 10
  market share
• Nordic economies expected to grow faster than
  that of Euro zone and remain strong
• Strong financial performance
• Highly cash generative
• Good margins
• Low risk, stable, well diversified revenue stream
• Benefits through purchasing and sourcing
  initiatives, working capital reduction and cost
  savings

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SYNERGIES AND BEST PRACTICE SHARING

• Supply chain benefits
• Sourcing opportunities
• Additional purchasing leverage
• Supplier consolidation
• Further develop ranges such as plumbing products,
  tool hire, insulation and commercial, using
  familiar Wolseley formats such as branch within
  a branch
• Cost savings from IT and indirect spend

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MANAGEMENT

• Experienced management team wish to remain with
  the Wolseley Group
• Fully engaged and focused on delivering business
  plan
• Adds to Wolseley Europe talent pool
• Post acquisition integration team selected to
  deliver post acquisition synergies

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• Steve Webster, Group Finance Director

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TRANSACTION HIGHLIGHTSDetails of the transaction

• Cash consideration of 1,498 million (1,023
  million) for equity plus assumption of net debt
  of 484 million (330 million), gives enterprise
  value of 1,982 million (1,353 million)
• All cash offer financed by debt
• Post acquisition gearing expected to be c128
  with interest cover (before amortisation of
  intangibles) of more than 7 times
• Completion, subject to regulatory approval,
  expected within two months i.e. in the new
  financial year commencing 1 August 2006

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TRANSACTION HIGHLIGHTSFinancial consequences of
the transaction

• Transaction expected to be immediately earnings
  enhancing
• Covers WACC in first full year (FY2008)
• Comfortably meets Wolseleys return criteria for
  a strategic acquisition i.e. ROGCE of more than
  5 more than the pre-tax WACC by year 5 (FY2012)
• Acquisition will provide synergy opportunities,
  lead to growth, improved margins and create
  significant shareholder value
• Combined effect of initiatives should generate
  additional annual pre-tax earnings in excess of
  2 of DTs current revenues over time

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PROFORMA GROUP REVENUE
12 months to 31 January 2006
Pre acquisition
Post acquisition
US Building Materials 21
Canada 5
Canada 4
US Building Materials 18
US Plumbing Heating 33
US Plumbing Heating 37
UK 17
UK 19
France 12
Nordic 11
Central Europe 5
Central Europe 5
France 13
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Appendices
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OVERVIEW OF DT GROUPMarket leading distributor
of building materials for trade professionals,
grey market and consumers
DT Group

___________________________ Source DT Group 1.
FX rate used DKK/EUR 7.45. 2. Divisional totals
do not reflect group total sales due to
interdivisional sales.
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