Lloyds TSB Commercial Finance has backed the management buy-out of Encon Group from its parent company, Wolseley UK, committing a £35 million line of credit for the company.

Lloyds TSB Commercial Finance has backed the management buy-out of Encon Group from its parent company, Wolseley UK, committing a £35 million line of credit for the company.

Established in 1981, Encon is a distributor of insulation and fire protection products, dry lining, suspended ceilings and partitioning to all sectors of the construction industry from major contractors and house builders to specialist sub-contractors.

The £194 million turnover business is headquartered in Wetherby, West Yorkshire and has a network of 24 sites across the UK, and more than 500 employees.

The buy-out, which Encon managing director Stuart Moore has led, will enable the company to pursue an expansion strategy that will concentrate on organic growth, and execute plans to open new sites and increase its geographical reach. Encon also plans to expand its partitioning and roofing product lines following the securing of the asset-based finance.

Moore, who has been with the company for 23 years, comments, ‘As the new owner of Encon, I believe we have an excellent opportunity to drive the business forward and I truly believe we have an exciting journey ahead of us.’

The deal comes less than four months after Wolseley UK announced internally that the company intended to sell Encon. According to a statement from the multinational, the decision to sell the division was made because Encon is ‘no longer part of its core strategic business activities’.

Wolseley UK managing director Steve Ashmore adds, ‘This decision has not been taken lightly as Encon is a sound and well-run business, but we believe it offers the best way forward for Encon and its employees under the leadership of Stuart Moore. It is also fully aligned to Wolseley UK’s strategic objectives to focus on being the best merchants in our chosen core markets.’