As filed with the Securities and Exchange Commission on March 1, 2024

No. 333-   

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Ferguson Enterprises Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		5070		38-4304133
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

751 Lakefront Commons

Newport News, Virginia 23606

+1-757-874-7795

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Ian Graham

Chief Legal Officer

751 Lakefront Commons

Newport News, Virginia 23606

+1-757-874-7795

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

Sophia Hudson, P.C.

Asher Qazi

601 Lexington Avenue

New York, New York 10022

+1-212-446-4800

 

 

Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement is declared effective and all other conditions to the Merger described in the enclosed proxy statement/prospectus have been satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer		☒		Smaller reporting company		☐
				Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐

Exchange Act Rule 14d-l(d) (Cross-Border Third-Party Tender Offer) ☐

 

*

Ferguson Enterprises Inc. (“New TopCo”) is a newly incorporated corporation under the laws of Delaware. Ferguson plc is a public company limited by shares incorporated in the Bailiwick of Jersey (“Jersey”). At the Effective Time (as defined below), on the terms and subject to the conditions set forth in the Merger Agreement described in the enclosed proxy statement/prospectus, Ferguson (Jersey) 2 Limited, a newly formed Jersey incorporated private limited company and direct, wholly owned subsidiary of New TopCo, is to be merged with and into Ferguson plc, resulting in Ferguson plc becoming a direct, wholly owned subsidiary of New TopCo and Ferguson (Jersey) 2 Limited ceasing to exist. The shares of common stock of New TopCo will be held by the former shareholders of Ferguson plc following the issuance of the shares registered pursuant to this registration statement on Form S-4. In accordance with Rule 12g-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the shares of common stock of the registrant, New TopCo, will be deemed to be registered under Section 12(b) of the Exchange Act as the successor to Ferguson plc. Upon the closing of the Merger, Ferguson plc will be renamed “Ferguson (Jersey) Limited.”

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

The information in this preliminary proxy statement/prospectus is not complete and may be changed. The registrant may not sell the securities described in this preliminary proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission is declared effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where such offer or sale is not permitted.

 

PRELIMINARY—SUBJECT TO COMPLETION, DATED MARCH 1, 2024

PROXY STATEMENT FOR

EXTRAORDINARY GENERAL MEETING OF

FERGUSON PLC (A JERSEY INCORPORATED COMPANY)

PROSPECTUS FOR

203,100,000 SHARES OF COMMON STOCK OF FERGUSON ENTERPRISES INC. (A DELAWARE CORPORATION) TO BE ISSUED IN A HOLDING COMPANY REORGANIZATION OF FERGUSON PLC (A JERSEY INCORPORATED COMPANY)

 

 

The board of directors (the “Ferguson Board”) of Ferguson plc, a public company limited by shares incorporated in Jersey, unanimously approved the merger (the “Merger”) of Ferguson (Jersey) 2 Limited (“Merger Sub”), a newly formed Jersey incorporated private limited company and direct, wholly owned subsidiary of Ferguson Enterprises Inc., a Delaware corporation (“New TopCo”), with and into Ferguson plc, with Ferguson plc surviving the Merger as a direct, wholly owned subsidiary of New TopCo and Merger Sub ceasing to exist, at 12:01 a.m. Eastern Time (5:01 a.m. U.K. Time) on August 1, 2024 (the “Effective Time”) and on the terms of and subject to the conditions of the Merger Agreement, dated as of February 29, 2024, by and among New TopCo, Merger Sub and Ferguson plc (as it may be amended from time to time, the “Merger Agreement”) which contains, among other things, the terms and means of effecting a proposed merger of Ferguson plc and Merger Sub under Part 18B (Mergers) of the Companies (Jersey) Law 1991 (as amended, modified, or re-enacted from time to time, the “Jersey Companies Law”), as more fully described elsewhere in this proxy statement/prospectus. Following completion of the transactions contemplated by the Merger Agreement, which are subject to the satisfaction of several conditions, including the approval by Ferguson Shareholders (as defined below) of the Merger Agreement at the extraordinary general meeting of Ferguson plc that will be held at [10:00 a.m.] Eastern Time ([3:00 p.m.] U.K. Time), on [May 30], 2024, at the offices of Freshfields Bruckhaus Deringer LLP, located at 100 Bishopsgate, London, EC2P 2SR, United Kingdom (the “Special Meeting”), New TopCo will be Ferguson plc’s parent company. If the transactions contemplated by the Merger Agreement are consummated, Ferguson Shareholders will become stockholders of New TopCo pursuant to the terms and conditions discussed in greater detail in this proxy statement/prospectus.

On the terms of, subject to the conditions of and/or in connection with the Merger Agreement at the Effective Time (as defined below), (i) each ordinary share, par value 10 pence per share, of Ferguson plc (collectively, the “Ferguson Shares” and each a, “Ferguson Share”) that is issued and outstanding at the Merger Record Time (as defined below) will automatically be cancelled without any repayment of capital and New TopCo will issue as consideration therefor new, duly authorized, validly issued, fully paid and non-assessable shares of common stock, par value $0.0001 per share, of New TopCo (the “New TopCo Common Stock”) to each Ferguson Shareholder on a one-for-one basis for each Ferguson Share held by such Ferguson Shareholder immediately preceding the Merger Record Time and (ii) each U.K. DI (as defined below) representing an issued and outstanding Ferguson Share at the Merger Record Time will be cancelled and a New TopCo U.K. DI (as defined below) representing one share of New TopCo Common Stock will be issued through CREST (as defined below) by the Depositary (as defined below) as consideration therefor to each holder of U.K. DIs on a one-for-one basis for each U.K. DI held by such holder immediately preceding the Merger Record Time. All Ferguson Shares held in treasury will be cancelled as a result of the Merger.

The Ferguson Shares are currently listed on the New York Stock Exchange (the “NYSE”) and the London Stock Exchange (the “LSE”) under the symbol “FERG.” On January 17, 2024, the last trading day before Ferguson publicly disclosed its intention to pursue the Merger, the closing price of the Ferguson Shares on the NYSE and LSE was $184.65 and £146.40 per share, respectively. On    , 2024, the last practicable date before the mailing date of this proxy statement/prospectus, the closing price of the Ferguson Shares on the NYSE and LSE was $    and £    per share, respectively. Upon completion of the Merger, the shares of New TopCo Common Stock are expected to be listed on the NYSE and LSE under the symbol “FERG.” The New TopCo Common Stock will be the only outstanding class of stock of New TopCo upon the consummation of the Merger.

 

 

This proxy statement/prospectus provides Ferguson Shareholders with detailed information about the proposed Merger and other matters to be considered at the Special Meeting of Ferguson plc. We encourage you to read this entire document carefully and in its entirety, including the annexes attached hereto and the other documents referred to herein. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 7 of this proxy statement/prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS, PASSED UPON THE MERITS OR FAIRNESS OF THE MERGER OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

 

This proxy statement/prospectus is dated      , 2024,

and is first being mailed to Ferguson Shareholders on or about     , 2024.

TABLE OF CONTENTS

 

		Page
FREQUENTLY USED TERMS			i
TRADEMARKS			iv
MARKET AND INDUSTRY DATA			iv
FORWARD-LOOKING STATEMENTS AND RISK FACTORS SUMMARY			v
QUESTIONS AND ANSWERS			vii
SUMMARY			1
MARKET PRICE AND DIVIDEND INFORMATION			6
RISK FACTORS			7
SPECIAL MEETING OF FERGUSON			26
PROPOSAL NO. 1—THE MERGER PROPOSAL			32
PROPOSAL NO. 2—THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSALS			38
ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.A			38
ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.B			40
ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.C			41
ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.D			42
ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.E			44
ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.F			45
ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.G			47
ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.H			48
INFORMATION ABOUT NEW TOPCO			49
INFORMATION ABOUT FERGUSON			52
MANAGEMENT OF NEW TOPCO			58
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			63
EXECUTIVE AND DIRECTOR COMPENSATION			65
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS			101
MATERIAL U.K. TAX CONSIDERATIONS			105
COMPARISON OF CORPORATE GOVERNANCE AND SHAREHOLDER RIGHTS			108
DESCRIPTION OF CAPITAL STOCK OF NEW TOPCO AFTER THE MERGER			123
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			127
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			129
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS			143
OTHER INFORMATION			144
LEGAL MATTERS			146
EXPERTS			146
WHERE YOU CAN FIND MORE INFORMATION			146
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1
ANNEX A: MERGER AGREEMENT			A-1
ANNEX B: FORM OF NEW TOPCO PROPOSED CERTIFICATE OF INCORPORATION			B-1
ANNEX C: FORM OF NEW TOPCO PROPOSED BYLAWS			C-1
ANNEX D: CERTIFICATES OF DIRECTORS OF FERGUSON PLC AND MERGER SUB REGARDING LIABILITIES BEFORE AND UP TO MERGER			D-1
ANNEX E: CERTIFICATE OF DIRECTORS OF FERGUSON (JERSEY) LIMITED REGARDING ABILITY TO CARRY ON BUSINESS FOLLOWING MERGER			E-1

FERGUSON PLC

1020 Eskdale Road, Winnersh Triangle, Wokingham

Berkshire, RG41 5TS, United Kingdom

Dear fellow shareholders,

On behalf of Ferguson plc, it is my pleasure to invite you to an extraordinary general meeting (the “Special Meeting”) of the shareholders of Ferguson plc. The Special Meeting will be held at [10:00 a.m.] Eastern Time ([3:00 p.m.] U.K. Time), on [May 30], 2024, at the offices of Freshfields Bruckhaus Deringer LLP, located at 100 Bishopsgate, London, EC2P 2SR, United Kingdom.

Since 2019, our board of directors (the “Ferguson Board”) has considered North America to be the best long-term location for Ferguson plc and has worked methodically and transparently with shareholders on this transformative journey, creating an additional listing on the New York Stock Exchange (the “NYSE”) in 2021, and then moving Ferguson plc’s primary listing from London to New York in 2022. During this period, approximately two-thirds of Ferguson plc’s shareholder base has become American and Ferguson plc has been considered a U.S. domestic issuer under the applicable Securities and Exchange Commission rules since August 1, 2023.

At the Special Meeting, you will be asked to vote on a transaction that would result in a corporate reorganization, where Ferguson plc would become a direct, wholly owned subsidiary of a Delaware corporation, Ferguson Enterprises Inc. The transaction would entail the merger of Ferguson (Jersey) 2 Limited (a newly formed Jersey incorporated private limited company and direct, wholly owned subsidiary of Ferguson Enterprises Inc.), with and into Ferguson plc under Part 18B (Mergers) of the Jersey Companies Law (the “Merger”). Following completion of the Merger, Ferguson Enterprises Inc. will be Ferguson plc’s parent company. If the Merger is consummated, you will become stockholders of Ferguson Enterprises Inc. pursuant to the terms and conditions discussed in greater detail in the accompanying materials.

The below abbreviated organizational charts depict Ferguson’s current structure, with the arrow depicting the Merger, and the intended structure following the consummation of the Merger:

 

We believe the Merger is the next natural step in our journey, which will better align our headquarters and governance with our operations and leadership and will simplify our corporate governance requirements. Moreover, the Ferguson Board does not foresee any material downsides to making this change.

The accompanying materials describe the Merger in greater detail, including the legal procedures necessary to effect the Merger. For our shareholders, if the Merger is consummated, the key change would be that they will no longer hold shares of Ferguson plc, a public limited company formed in Jersey that is subject to Jersey law and the requirements of its organizational documents, but will instead hold common stock of Ferguson Enterprises Inc., a public corporation incorporated in Delaware that is subject to Delaware law and the requirements of its organizational documents that are more fully described in the accompanying materials. As with the Ferguson Shares, the shares of common stock of Ferguson Enterprises Inc. are expected to be listed on both the NYSE and the LSE.

The Ferguson Board appreciates the input of all shareholders. Representatives from Ferguson plc will be available at the Special Meeting to answer any questions you may have. Whether or not you are able to attend the Special Meeting, I urge you to promptly cast your vote on this important matter by following the instructions in the accompanying materials.

Your vote is very important. The Merger cannot be completed without satisfying certain conditions, the most important of which is the approval of the Merger Agreement by at least two-thirds (66²/₃%) of the total number of votes cast at the Special Meeting, pursuant to which the Merger will be effected.

I appreciate your attention to this proposal and your continued support of our company.

 

FERGUSON PLC

1020 Eskdale Road, Winnersh Triangle, Wokingham

Berkshire, RG41 5TS, United Kingdom

NOTICE OF EXTRAORDINARY GENERAL MEETING

TO BE HELD ON [MAY 30], 2024

TO THE SHAREHOLDERS OF FERGUSON PLC (“Ferguson Shareholders”):

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (“Special Meeting”) of Ferguson plc, a public company limited by shares incorporated in Jersey (“Ferguson”), will be held at [10:00 a.m.] Eastern Time ([3:00 p.m.] U.K. Time), on [May 30], 2024, at the offices of Freshfields Bruckhaus Deringer LLP, located at 100 Bishopsgate, London, EC2P 2SR, United Kingdom. You are cordially invited to attend the Special Meeting, which will be held to consider and, if thought fit, to pass the following resolutions as ordinary and special resolutions of Ferguson (as the case may be, as indicated below):

SPECIAL RESOLUTION:

Proposal 1. The Merger Proposal (“Merger Proposal,” and together with the Advisory Organizational Documents Proposals (as defined below), collectively or as a subset thereof, as applicable, the “Proposals”)

RESOLVED, that the merger agreement entered into by and among Ferguson Enterprises Inc., a newly incorporated corporation under the laws of Delaware, Ferguson (Jersey) 2 Limited, a newly formed Jersey incorporated private limited company and Ferguson plc (as it may be amended from time to time, the “Merger Agreement”) and that states, among other things, the terms and means of effecting a merger (the “Merger”) of Ferguson (Jersey) 2 Limited and Ferguson plc under Part 18B (Mergers) of the Companies (Jersey) Law 1991 (as amended, modified, or re-enacted from time to time, the “Jersey Companies Law”) be hereby approved for all purposes, including (without limitation) for the purposes of Article 127F(1) of the Jersey Companies Law and the directors of Ferguson plc (or a duly authorized committee thereof) be and are authorized to take all such action as they may consider necessary or desirable for the implementation of the Merger pursuant to the terms and subject to the conditions contained in the Merger Agreement.

ORDINARY RESOLUTIONS:

Advisory Organizational Documents Proposal 2.A (“Advisory Organizational Documents Proposal 2.A”)

RESOLVED, that, on an advisory basis, (i) the proposed amended and restated certificate of incorporation (as amended from time to time, the “New TopCo Proposed Certificate of Incorporation”) of Ferguson Enterprises Inc. (“New TopCo”), once adopted, may be amended, altered or repealed in the manner prescribed by the Delaware General Corporation Law, as in effect from time to time and (ii) the proposed amended and restated bylaws of New TopCo, once adopted, may be amended, altered or repealed from time to time by the stockholders of New TopCo by the affirmative vote of holders of a majority of the voting power of the then outstanding shares of New TopCo entitled to vote thereon, and such additional vote as may be required by the New TopCo Proposed Certificate of Incorporation.

Advisory Organizational Documents Proposal 2.B (“Advisory Organizational Documents Proposal 2.B”)

RESOLVED, that, on an advisory basis, the proposed amended and restated bylaws of Ferguson Enterprises Inc. (“New TopCo”), once adopted, may be amended, altered or repealed from time to time by the board of directors of New TopCo without seeking any approval by the New TopCo stockholders, in accordance with the Delaware General Corporation Law, as in effect from time to time.

Advisory Organizational Documents Proposal 2.C (“Advisory Organizational Documents Proposal 2.C”)

RESOLVED, that, on an advisory basis, provisions in the proposed amended and restated bylaws of Ferguson Enterprises Inc. (“New TopCo”) and the proposed amended and restated certificate of incorporation of New TopCo that provide that all vacancies on the New TopCo board of directors be filled solely and exclusively by the affirmative vote of a majority of the remaining directors then in office, and not by the stockholders, be, and hereby are, authorized.

Advisory Organizational Documents Proposal 2.D (“Advisory Organizational Documents Proposal 2.D”)

RESOLVED, that, on an advisory basis, provisions in the proposed amended and restated bylaws of Ferguson Enterprises Inc. (“New TopCo”) relating to the right of New TopCo stockholders to request a special meeting of New TopCo stockholders be, and are hereby, authorized.

Advisory Organizational Documents Proposal 2.E (“Advisory Organizational Documents Proposal 2.E”)

RESOLVED, that, on an advisory basis, the provisions in the proposed amended and restated certificate of incorporation of Ferguson Enterprises Inc. (“New TopCo”) limiting personal liability for New TopCo directors and certain officers for monetary damages for breach of fiduciary duty as a director or as an officer to the fullest extent permitted under the Delaware General Corporation Law, as in effect from time to time, be, and are hereby, authorized.

Advisory Organizational Documents Proposal 2.F (“Advisory Organizational Documents Proposal 2.F”)

RESOLVED, that, on an advisory basis, the exclusive forum provisions in the proposed amended and restated certificate of incorporation of Ferguson Enterprises Inc. be, and are hereby, authorized.

Advisory Organizational Documents Proposal 2.G (“Advisory Organizational Documents Proposal 2.G”)

RESOLVED, that, on an advisory basis, the board of directors (the “New TopCo Board”) of Ferguson Enterprises Inc. (“New TopCo”) be, and is hereby, authorized to issue up to 100,000 shares of preferred stock of New TopCo, par value $0.0001 per share, in one or more series, with such terms and conditions and at such future dates as may be expressly determined by the New TopCo Board and as may be permitted by the Delaware General Corporation Law, as in effect from time to time.

Advisory Organizational Documents Proposal 2.H (“Advisory Organizational Documents Proposal 2.H” and together with Advisory Organizational Documents Proposal 2.A through 2.G, the “Advisory Organizational Documents Proposals”)

RESOLVED, that, on an advisory basis, the board of directors of Ferguson Enterprises Inc. (“New TopCo”) be, and is hereby, authorized to issue new shares of common stock, par value $0.0001 per share, of New TopCo in the future without offering pre-emptive rights.

Ferguson has specified that only those shareholders entered on the register of members of Ferguson on April [●], 2024 (the “Record Date”) are entitled to attend or vote at the Special Meeting (or, if the Special Meeting is adjourned, on the register of members of Ferguson not less than 10 days nor more than 60 days before the time of the adjourned meeting). If you are a Ferguson U.K. DI Holder, you will not be entitled to vote directly at the Special Meeting. Instead, you will be asked to provide voting instructions to the depositary of the U.K. DIs, Computershare Investor Services PLC (the “Depositary”). If you held a U.K. DI as of 6:00 p.m. U.K. Time on [May 23], 2024 (or, if the Special Meeting is adjourned, on such other date as is communicated to U.K. DI Holders), you are entitled to provide voting instructions to the Depositary in respect of the number of U.K. DIs registered in your name at that time. If you are a beneficial owner, please check with your broker, bank, or other nominee, as applicable, and carefully follow the voting procedures provided to you.

The accompanying materials and proxy card are being provided to Ferguson Shareholders in connection with the solicitation of proxies to be voted at the Special Meeting and at any adjournment of the Special Meeting. Whether or not you plan to attend the Special Meeting, all Ferguson Shareholders are urged to read these materials carefully and in their entirety, including the annexes attached thereto and the documents referred to therein, for a more complete description of the proposed Merger and related transactions and each of the Proposals. You should also carefully consider the risk factors described in the “Risk Factors” section beginning on page 7 of the proxy statement/prospectus, and the differences between Ferguson’s Memorandum and Articles of Association, as currently in effect, and New TopCo’s proposed certificate of incorporation and bylaws further described in the “Comparison of Corporate Governance and Shareholder Rights” section beginning on page 108 of the proxy statement/prospectus.

After careful consideration, the Ferguson Board has unanimously approved the Merger and recommends that Ferguson Shareholders vote “FOR” the Merger Proposal and “FOR” each of the Advisory Organizational Documents Proposals presented to Ferguson Shareholders in this Notice of Meeting and the accompanying materials.

The Merger Proposal is proposed as a special resolution, which means that for this resolution to be passed, at least two-thirds (66²/₃%) of the total number of votes cast at the Special Meeting must be cast in favor of this resolution. The Advisory Organizational Documents Proposals are proposed as ordinary resolutions, which means that for each of those resolutions to be passed more than half of the votes cast must be cast in favor of such resolution.

The consummation of the Merger is conditioned on the approval of the Merger Proposal. The approval of the Merger Proposal is not conditioned upon the approval of any other Proposal set forth in this Notice of Meeting and the accompanying materials. With respect to the Advisory Organizational Documents Proposals, although Ferguson is seeking a shareholder vote on such Proposals, a vote for each such Proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board, and approval of such Proposals is also not a condition to the closing of the Merger. However, Ferguson values the opinions expressed by shareholders and will consider the outcome of the vote on the Advisory Organizational Documents Proposals when making future decisions relating to the corporate governance practices of New TopCo.

Your vote is very important. Whether or not you plan to attend the Special Meeting, please vote as soon as possible by following the instructions in the accompanying materials to make sure that your Ferguson Shares are represented at

the Special Meeting. If you are a Ferguson U.K. DI Holder, you will need to provide voting instructions to the Depositary. The transactions contemplated by the Merger Agreement will be consummated only if the Merger Proposal is approved at the Special Meeting.

All resolutions at the Special Meeting will be decided by a poll. We believe that this is a more transparent and equitable method of voting, as shareholder votes are counted according to the number of shares held, ensuring an exact and definitive result.

If you have any questions or need assistance voting your Ferguson Shares, please contact Morrow Sodali LLC, Ferguson’s proxy solicitor, by calling 800-662-5200 or banks and brokers can call collect at 203-658-9400, or by emailing ferg.info@investor.morrowsodali.com.

Thank you for your participation. Ferguson looks forward to your continued support.

 

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The Securities and Exchange Commission (“SEC”) allows us to “incorporate by reference” information that Ferguson files with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this proxy statement/prospectus. References to “contained” or “included in” or similar words with respect this proxy statement/prospectus shall include the information incorporated by reference. Information in this proxy statement/prospectus supersedes information incorporated by reference that Ferguson filed with the SEC prior to the date of this proxy statement/prospectus, while information that Ferguson files later with the SEC will automatically update and supersede the information in this proxy statement/prospectus. We also incorporate by reference into this proxy statement/prospectus the documents listed below and any future filings made by Ferguson with the SEC (other than Current Reports or portions thereof furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items and other portions of documents that are furnished, but not filed, pursuant to applicable rules promulgated by the SEC) that are filed by Ferguson with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the U.S. Securities Exchange Act, after the filing of this proxy statement/prospectus but prior to the date of the Special Meeting:

 

•

Ferguson’s Annual Report on Form 10-K for the fiscal year ended July 31, 2023, filed with the SEC on September 26, 2023 (except for Item 8 and Item 9A);

 

•

Ferguson’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2023, filed with the SEC on December 6, 2023;

 

•

Ferguson’s Definitive Proxy Statement on Schedule 14A, filed on October 17, 2023; and

 

•

Ferguson’s Current Reports on Form 8-K (other than information furnished rather than filed) filed with the SEC on November  29, 2023, December  4, 2023, January  12, 2024, January  18, 2024, and March 1, 2024.

We will provide to each person, including any beneficial owner, to whom a proxy statement/prospectus is delivered, without charge upon written or oral request, a copy of any or all of the documents that are incorporated by reference into this proxy statement/prospectus but not delivered with the proxy statement/prospectus, including exhibits which are specifically incorporated by reference into such documents. You should direct any requests for documents to Ferguson’s Company Secretary in writing by mail at 1020 Eskdale Road, Winnersh Triangle, Wokingham, Berkshire, RG41 5TS, United Kingdom; by email at investor@ferguson.com; or by telephone at +44 (0) 118 927 3800. To obtain timely delivery of these materials, you must request the information no later than [May 22], 2024, which is five business days before the Special Meeting.

Any statement contained herein or in a document incorporated or deemed to be incorporated by reference into this proxy statement/prospectus will be deemed to be modified or superseded for purposes of the document to the extent that a statement contained in this proxy statement/prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this proxy statement/prospectus modifies or supersedes the statement.

FREQUENTLY USED TERMS

Unless otherwise specified or the context otherwise requires, the terms “we,” “us,” “our,” the “Company,” “Ferguson” and other similar terms refer to Ferguson plc and its consolidated subsidiaries prior to the Effective Time and to Ferguson Enterprises Inc. and its consolidated subsidiaries after the Effective Time. In addition, as used in this proxy statement/prospectus, unless otherwise noted or the context otherwise requires, references to:

“Advisory Organizational Documents Proposal 2.A” are to the proposal, on an advisory basis, to authorize provisions in the New TopCo Proposed Certificate of Incorporation and New TopCo Proposed Bylaws under which, (i) the New TopCo Proposed Certificate of Incorporation, once adopted, may be amended, altered or repealed in the manner prescribed by the DGCL and (ii) the New TopCo Proposed Bylaws, once adopted, may be amended, altered or repealed from time to time by the stockholders of New TopCo by the affirmative vote of holders of a majority of the voting power of the then outstanding shares of New TopCo entitled to vote thereon, and such additional vote as may be required by the New TopCo Proposed Certificate of Incorporation;

“Advisory Organizational Documents Proposal 2.B” are to the proposal, on an advisory basis, to authorize provisions in the New TopCo Proposed Bylaws that provide that the New TopCo Proposed Bylaws, once adopted, may be amended, altered or repealed from time to time by the New TopCo Board without seeking any approval by the New TopCo stockholders, in accordance with the DGCL;

“Advisory Organizational Documents Proposal 2.C” are to the proposal, on an advisory basis, to authorize provisions in the New TopCo Proposed Certificate of Incorporation and the New TopCo Proposed Bylaws that provide that all vacancies on the New TopCo Board will be filled solely and exclusively by the affirmative vote of a majority of the remaining directors then in office, and not by the stockholders;

“Advisory Organizational Documents Proposal 2.D” are to the proposal, on an advisory basis, to authorize provisions in the New TopCo Proposed Bylaws relating to the right of New TopCo stockholders to request a special meeting of New TopCo stockholders;

“Advisory Organizational Documents Proposal 2.E” are to the proposal, on an advisory basis, to authorize provisions in the New TopCo Proposed Certificate of Incorporation limiting personal liability of New TopCo directors and certain officers for monetary damages for breach of fiduciary duty as a director or as an officer to the fullest extent permitted under the DGCL;

“Advisory Organizational Documents Proposal 2.F” are to the proposal, on an advisory basis, to authorize the exclusive forum provisions in the New TopCo Proposed Certificate of Incorporation;

“Advisory Organizational Documents Proposal 2.G” are to the proposal, on an advisory basis, to authorize New TopCo Board to issue up to 100,000 shares of New TopCo Preferred Stock in one or more series, with such terms and conditions and at such future dates as may be expressly determined by the New TopCo Board and as may be permitted by the DGCL;

“Advisory Organizational Documents Proposal 2.H” are to the proposal, on an advisory basis, to authorize the New TopCo Board to issue new shares of New TopCo Common Stock in the future without offering pre-emptive rights;

“Advisory Organizational Documents Proposals” are to Advisory Organizational Documents Proposals 2.A though 2.H, collectively;

“Assumed Ferguson Employee Share Plans” are to the Ferguson plc 2023 Omnibus Equity Incentive Plan, the Ferguson Group Employee Share Purchase Plan 2021, the Ferguson Group International Sharesave Plan 2019, the Ferguson Group Performance Ordinary Share Plan 2019, the Ferguson Group Ordinary Share Plan 2019 and the Ferguson Group Long Term Incentive Plan 2019;

“Audited Consolidated Financial Statements” are to the audited consolidated balance sheets of Ferguson plc and its subsidiaries as of July 31, 2023 and July 31, 2022 and to the related consolidated statements of earnings, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended July 31, 2023, including the notes and all related compilations, reviews and other reports issued by Ferguson’s accountants with respect thereto;

“CAD” are to Canadian dollars;

“City Code” are to the City Code on Takeovers and Mergers, issued and administered by the Takeover Panel;

“Computershare” are to Computershare Trust Company N.A., the transfer agent of Ferguson;

“Consolidated Financial Statements” are to the Audited Consolidated Financial Statements and the Unaudited Interim Condensed Consolidated Financial Statements, together;

“Court of Chancery” are to the Court of Chancery of the State of Delaware;

 

i

“CREST” are to the system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear in accordance with the Relevant System of which Euroclear is the “Operator” (as such term is defined in the CREST Regulations);

“CREST Regulations” are to the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended from time to time;

“Depositary” are to Computershare Investor Services PLC, the issuer of the U.K. DIs;

“DGCL” are to the Delaware General Corporation Law, as in effect from time to time;

“DTR” are to the Disclosure Guidance and Transparency Rules produced by the FCA and forming part of the FCA Handbook;

“Effective Time” are to 12:01 a.m. Eastern Time (5:01 a.m. U.K. Time) on August 1, 2024;

“ESPP” are to the Ferguson Group Employee Share Purchase Plan 2021;

“FCA” are to the Financial Conduct Authority;

“Ferguson Articles” are to Ferguson plc’s Articles of Association, as currently in effect;

“Ferguson Board” are to the board of directors of Ferguson plc;

“Ferguson Employee Share Plans” are to the Omnibus Plan, the LTIP, the POSP, the OSP and the ESPP, together;

“Ferguson Governing Documents” are to Ferguson plc’s Memorandum and Articles of Association, as currently in effect;

“Ferguson Shareholders” are to the holders of Ferguson Shares;

“Ferguson Shares” are to the ordinary shares, par value 10 pence per share, of Ferguson plc;

“GBP” or “£” are to U.K. pounds sterling;

“Jersey” are to the Bailiwick of Jersey;

“Jersey Companies Law” are to Companies (Jersey) Law 1991, as amended, modified, or re-enacted from time to time;

“LSE” are to the London Stock Exchange;

“LTIP” are to the Ferguson Group Long Term Incentive Plan 2019;

“Merger” are to the merger of Ferguson plc and Merger Sub under Part 18B (Mergers) of the Jersey Companies Law, with Ferguson plc surviving the merger and becoming a direct, wholly owned subsidiary of New TopCo and Merger Sub ceasing to exist, pursuant to the terms and subject to the conditions provided in the Merger Agreement;

“Merger Agreement” are to the Merger Agreement, dated as of February 29, 2024, by and among New TopCo, Merger Sub and Ferguson plc (as it may be amended from time to time), a copy of which is attached to this proxy statement/prospectus as Annex A;

“Merger Proposal” are to the proposal to approve the Merger Agreement, pursuant to which, among other things, Merger Sub will merge with and into Ferguson plc in accordance with Part 18B (Mergers) of the Jersey Companies Law, with Ferguson plc surviving the Merger as a direct, wholly owned subsidiary of New TopCo and Merger Sub ceasing to exist, on the terms of and subject to the conditions of the Merger Agreement, as more fully described elsewhere in this proxy statement/prospectus;

“Merger Record Time” are to 6:00 p.m. Eastern Time on July 31, 2024;

“Merger Sub” are to Ferguson (Jersey) 2 Limited, a newly formed Jersey incorporated private limited company and direct, wholly owned subsidiary of New TopCo;

“Morrow Sodali” are to Morrow Sodali LLC, Ferguson’s proxy solicitor for the Special Meeting;

“NED Plan” are to the Ferguson Non-Employee Director Incentive Plan 2022;

“New TopCo” are to Ferguson Enterprises Inc., a Delaware corporation;

“New TopCo Board” are to the board of directors of New TopCo;

“New TopCo Common Stock” are to the shares of common stock, par value $0.0001 per share, of New TopCo;

“New TopCo Preferred Stock” are to the shares of preferred stock, par value $0.0001 per share, of New TopCo;

 

ii

“New TopCo Proposed Bylaws” are to the proposed amended and restated bylaws of New TopCo, substantially in the form attached hereto as Annex C, as amended from time to time;

“New TopCo Proposed Certificate of Incorporation” are to the proposed amended and restated certificate of incorporation of New TopCo, substantially in the form attached hereto as Annex B, as amended from time to time;

“New TopCo Proposed Organizational Documents” are to the New TopCo Proposed Certificate of Incorporation and the New TopCo Proposed Bylaws, together;

“New TopCo U.K. DIs” are to depositary interests issued through CREST by the Depositary representing a beneficial interest in New TopCo Common Stock;

“Non-Employee Directors” are, prior to the Effective Time, to the members of the Ferguson Board who are not employees of Ferguson and, after the Effective Time, to the members of the New TopCo Board who are not employees of New TopCo;

“NYSE” are to the New York Stock Exchange;

“Omnibus Plan” are to the Ferguson plc 2023 Omnibus Equity Incentive Plan;

“OSP” are to the Ferguson Group Ordinary Share Plan 2019;

“Overseas Shareholders” are to Ferguson Shareholders, other than those persons who are citizens, residents or nationals of Jersey, the United Kingdom and/or the United States;

“POSP” are to the Ferguson Group Performance Ordinary Share Plan 2019;

“Proposals” are to the Merger Proposal and the Advisory Organizational Documents Proposals, collectively or as a subset thereof, as applicable;

“Record Date” are to April [●], 2024, which is the date Ferguson plc has specified as the date on which only those shareholders entered on the register of members of Ferguson plc on such date are entitled to attend or vote at the Special Meeting (or, if the Special Meeting is adjourned, on the register of members of Ferguson plc not less than 10 days nor more than 60 days before the time of the adjourned meeting);

“Relevant System” are to any computer-based system, and procedures, which enable title to units of a share or security to be evidenced and transferred without a written instrument, and which facilitate supplementary and incidental matters in accordance with the CREST Regulations;

“Royal Court” are to the Royal Court of Jersey;

“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;

“SEC” are to the U.S. Securities and Exchange Commission;

“Special Meeting” are to the extraordinary general meeting of Ferguson plc that will be held at [10:00 a.m.] Eastern Time ([3:00 p.m.] U.K. Time), on [May 30], 2024, at the offices of Freshfields Bruckhaus Deringer LLP, located at 100 Bishopsgate, London, EC2P 2SR, United Kingdom;

“Takeover Panel” are to the Panel on Takeovers and Mergers of the U.K;

“U.K.” are to the United Kingdom of Great Britain and Northern Ireland;

“U.K. DIs” are to depositary interests issued through CREST by the Depositary representing a beneficial interest in a Ferguson Share;

“U.K. Listing Rules” are to the U.K. Listing Rules in force from time to time, as published by the FCA;

“Unaudited Interim Condensed Consolidated Financial Statements” are to the unaudited condensed consolidated balance sheet of Ferguson plc and its subsidiaries as of October 31, 2023 and to the related condensed consolidated statements of earnings, comprehensive income, shareholders’ equity and cash flows for the three-month period ended October 31, 2023 and the three-month period ended October 31, 2022, including the notes thereto;”

“U.S.” are to the United States of America;

“USD” or “$” are to United States dollars;

“U.S. GAAP” are to accounting principles generally accepted in the U.S.;

“U.S. Securities Act” are to the Securities Act of 1933, as amended; and

“U.S. Securities Exchange Act” are to the Securities Exchange Act of 1934, as amended.

 

iii

TRADEMARKS

All trademarks, trade names and service marks appearing in this proxy statement/prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this proxy statement/prospectus are referred to without the symbols ^® and ^™, but such references should not be construed as any indication that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend to use or display other companies’ trademarks or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

MARKET AND INDUSTRY DATA

The information contained in this proxy statement/prospectus or incorporated by reference herein that has been sourced from third parties has been accurately reproduced and, as far as we are aware and able to ascertain from the information published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading. Industry publications generally state that their information is obtained from sources they believe reliable but that the accuracy and completeness of such information is not guaranteed and that the projections they contain are based on a number of significant assumptions. We are not aware of any exhaustive industry or market reports that cover or address our specific markets.

 

iv

FORWARD-LOOKING STATEMENTS AND RISK FACTORS SUMMARY

Certain information included in this proxy statement/prospectus is forward-looking, including within the meaning of the Private Securities Litigation Reform Act of 1995, and involves risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied by forward-looking statements. Forward-looking statements cover all matters which are not historical facts and include, without limitation, statements or guidance regarding or relating to the Merger, the benefits of the Merger, our ability to manage the risks relating to the Merger, our future financial position, results of operations and growth, projected interest in and ownership of our ordinary shares by investors including as a result of inclusion in North American market indices, plans and objectives for the future including our capabilities and priorities, risks associated with changes in global and regional economic, market and political conditions, ability to manage supply chain challenges, ability to manage the impact of product price fluctuations, our financial condition and liquidity, legal or regulatory changes, and other statements concerning the success of our business and strategies.

Forward-looking statements can be identified by the use of forward-looking terminology, including terms such as “believes,” “estimates,” “anticipates,” “expects,” “forecasts,” “intends,” “continues,” “plans,” “projects,” “goal,” “target,” “aim,” “may,” “will,” “would,” “could” or “should” or, in each case, their negative or other variations or comparable terminology and other similar references to future periods. Forward-looking statements speak only as of the date on which they are made. They are not assurances of future performance and are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Therefore, you should not place undue reliance on any of these forward-looking statements. Although we believe that the forward-looking statements contained in this proxy statement/prospectus are based on reasonable assumptions, you should be aware that many factors could cause actual results to differ materially from those in such forward-looking statements, including but not limited to:

 

•

a delay or our inability to consummate the Merger due to, among other things, the failure to obtain approval by the requisite vote of Ferguson Shareholders at the Special Meeting;

 

•

unexpected costs relating to the Merger and other business uncertainties;

 

•

the outcome of any legal proceedings that may be instituted against us following announcement of the Merger and related transactions;

 

•

the risk that the Merger disrupts current plans and operations;

 

•

the risk that Ferguson’s effective tax rate may increase in the future, including as a result of the Merger;

 

•

the risk that Ferguson Shareholders may recognize taxable gain or other income with respect to their Ferguson Shares at the Effective Time;

 

•

unanticipated adverse tax consequences to Ferguson, New TopCo and/or our shareholders in connection with the Merger;

 

•

our ability to adapt to operating under the laws of the State of Delaware and changes in shareholder rights as a result of the Merger;

 

•

weakness in the economy, market trends, uncertainty and other conditions in the markets in which we operate, and other factors beyond our control, including disruption in the financial markets and any macroeconomic or other consequences of political unrest, disputes or war;

 

•

failure to rapidly identify or effectively respond to direct and/or end customers’ wants, expectations or trends, including costs and potential problems associated with new or upgraded information technology systems or our ability to timely deploy new omni-channel capabilities;

 

•

decreased demand for our products as a result of operating in highly competitive industries and the impact of declines in the residential and non-residential markets, as well as the repair, maintenance and improvement (“RMI”) and new construction markets;

 

•

changes in competition, including as a result of market consolidation or competitors responding more quickly to emerging technologies (such as generative artificial intelligence (“AI”));

 

•

failure of a key information technology system or process as well as exposure to fraud or theft resulting from payment-related risks;

 

•

privacy and protection of sensitive data failures, including failures due to data corruption, cybersecurity incidents or network security breaches;

 

v

•

ineffectiveness of or disruption in our domestic or international supply chain or our fulfillment network, including delays in inventory availability at our distribution facilities and branches, increased delivery costs or lack of availability;

 

•

failure to effectively manage and protect our facilities and inventory or to prevent personal injury to customers, suppliers or associates, including as a result of workplace violence;

 

•

unsuccessful execution of our operational strategies;

 

•

failure to attract, retain and motivate key associates; exposure of associates, contractors, customers, suppliers and other individuals to health and safety risks;

 

•

inherent risks associated with acquisitions, partnerships, joint ventures and other business combinations, dispositions or strategic transactions;

 

•

regulatory, product liability and reputational risks and the failure to achieve and maintain a high level of product and service quality;

 

•

inability to renew leases on favorable terms or at all, as well as any remaining obligations under a lease when we close a facility;

 

•

changes in, interpretations of, or compliance with tax laws may adversely affect us or our shareholders;

 

•

our indebtedness and changes in our credit ratings and outlook;

 

•

fluctuations in product prices (e.g., commodity-priced materials, inflation/deflation) and foreign currency;

 

•

funding risks related to our defined benefit pension plans;

 

•

legal proceedings as well as failure to comply with domestic and foreign laws, regulations and standards, as those laws, regulations and standards or interpretations and enforcement thereof may change, or the occurrence of unforeseen developments such as litigation;

 

•

our failure to comply with the obligations associated with being a U.S. domestic issuer and the costs associated therewith;

 

•

the costs and risk exposure relating to environmental, social and governance (“ESG”) matters, including sustainability issues, regulatory or legal requirements, and disparate stakeholder expectations;

 

•

adverse impacts caused by a public health crisis; and

 

•

other risks and uncertainties set forth in this proxy statement/prospectus, including under the heading “Risk Factors” in this proxy statement/prospectus and in other filings we make with the SEC in the future.

Additionally, forward-looking statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Other than in accordance with our legal or regulatory obligations, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 

vi

QUESTIONS AND ANSWERS

The following questions and answers below highlight only selected information from this proxy statement/prospectus and only briefly address some commonly asked questions about the Proposals to be presented at the Special Meeting, including with respect to the Merger. The following questions and answers may not include all the information that is important to Ferguson Shareholders. Ferguson Shareholders are urged to read this proxy statement/prospectus carefully and in its entirety, including the annexes attached hereto and the documents referred to herein, to fully understand the Merger and the voting procedures for the Special Meeting.

QUESTIONS AND ANSWERS ABOUT THE MERGER

 

Q:	WHAT IS THE MERGER?

 

A:

The Ferguson Board believes that it is in your and Ferguson’s best interest for the ultimate parent company of Ferguson plc and its subsidiaries to be a corporation incorporated under the laws of the State of Delaware, which will be effected through the Merger. At the Effective Time, on the terms of and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Ferguson plc, with Merger Sub ceasing to exist and Ferguson plc continuing as the surviving entity (the “Surviving Entity”). The Surviving Entity will change its name to “Ferguson (Jersey) Limited,” will change its status to a private company, and will be a direct, wholly owned subsidiary of New TopCo. Following completion of the transactions contemplated by the Merger Agreement, New TopCo will be Ferguson plc’s parent company and the New TopCo Common Stock is expected to be listed on the NYSE and the LSE under the symbol “FERG.” If the transactions contemplated by the Merger Agreement are consummated, you will become a stockholder of New TopCo pursuant to the terms and conditions discussed in greater detail in this proxy statement/prospectus.

Please read the section “Comparison of Corporate Governance and Shareholder Rights” for a description of the material differences between the Ferguson Governing Documents and the New TopCo Proposed Organizational Documents.

 

Q:	WHO IS NEW TOPCO?

 

A:

Ferguson Enterprises Inc., which we refer to as New TopCo, is a corporation newly incorporated under the laws of Delaware. If the Merger is completed, New TopCo will become the ultimate parent company of Ferguson plc and its subsidiaries. At the Effective Time, all Ferguson Shareholders will be issued an identical number of shares of New TopCo Common Stock as the number of Ferguson Shares they held immediately preceding the Merger Record Time.

 

Q:	WHO IS MERGER SUB?

 

A:

Ferguson (Jersey) 2 Limited, which we refer to as Merger Sub, is a newly formed Jersey incorporated private limited company and direct, wholly owned subsidiary of New TopCo. Prior to the Merger, Merger Sub will have no property, assets, liabilities or operations, other than those incident to its formation. At the Effective Time, Merger Sub will merge with and into Ferguson plc, with Ferguson plc surviving the Merger as a direct, wholly owned subsidiary of New TopCo and Merger Sub ceasing to exist, on the terms of and subject to the conditions set forth in the Merger Agreement.

 

Q:	WHAT WILL HAPPEN TO THE FERGUSON SHARES AND U.K. DIS UPON THE CONSUMMATION OF THE MERGER?

 

A:

On the terms of, subject to the conditions of and/or in connection with the Merger Agreement, at the Effective Time, (i) each Ferguson Share that is issued and outstanding at the Merger Record Time will automatically be cancelled without any repayment of capital and New TopCo will issue as consideration therefor new, duly authorized, validly issued, fully paid and non-assessable shares of New TopCo Common Stock to each Ferguson Shareholder on a one-for-one basis for each Ferguson Share held by such Ferguson Shareholder immediately preceding the Merger Record Time, and (ii) each U.K. DI representing an issued and outstanding Ferguson Share at the Merger Record Time will be cancelled and a New TopCo U.K. DI representing one share of New TopCo Common Stock will be issued through CREST by the Depositary as consideration therefor to each holder of U.K. DIs on a one-for-one basis for each U.K. DI held by such holder immediately preceding the Merger Record Time. All Ferguson Shares held in treasury will be cancelled as a result of the Merger.

The New TopCo U.K. DIs will be created and issued under the terms of a deed poll made by the Depositary constituting the New TopCo U.K. DIs (the “New TopCo U.K. DI Deed”), which will govern the relationship between the Depositary and the holders of the New TopCo U.K. DIs. The New TopCo U.K. DI Deed is available on request from the Depositary. Holders of U.K. DIs should consult with the Depositary regarding any arrangements to be made to ensure timely payment of dividends to their accounts following consummation of the Merger.

 

vii

Q:	WILL THE NEW TOPCO COMMON STOCK ISSUED UNDER THE MERGER BE LISTED ON AN EXCHANGE?

 

A:

Yes. The New TopCo Common Stock is expected to be listed on the NYSE and the LSE under the trading symbol “FERG.” The Ferguson Shares currently trade on the NYSE and the LSE under the trading symbol “FERG.” When the Merger is completed, the Ferguson Shares currently listed on the NYSE and the LSE under the trading symbol “FERG” will cease to be traded on the NYSE and the LSE, and will be deregistered under the U.S. Securities Exchange Act.

 

Q:	HOW DO I RECEIVE SHARES OF NEW TOPCO COMMON STOCK?

 

A:

Beneficial holders of shares held in “street name” through a bank, broker or other nominee and record owners of shares held in book-entry form will not be required to take any action. Your ownership of shares of New TopCo Common Stock will be recorded in book-entry form by your nominee (for shares held in “street name”) or directly on the New TopCo share register to be maintained by Computershare (for shares held by record owners in book-entry form), without the need for any additional action on your part. Holders of shares in book-entry form will receive a statement of their holdings in New TopCo after the Merger. Holders of Ferguson Shares represented in the form of U.K. DIs will not be required to take any action, with New TopCo U.K. DIs being automatically credited to their CREST participant accounts. To the extent possible, all holder account numbers, email addresses, bank account details and shareholder elections recorded by Computershare will remain valid and applied to the share register of New TopCo.

 

Q.	WILL THE MERGER DILUTE MY ECONOMIC INTEREST?

 

A:

No, your fully diluted relative economic ownership will not change as a result of the Merger. At the Effective Time, your Ferguson Shares will be automatically cancelled and New TopCo will issue to you as consideration therefor new, duly authorized, validly issued, fully paid and non-assessable shares of New TopCo Common Stock on a one-for-one basis for each Ferguson Share you hold immediately preceding the Merger Record Time. Following the Effective Time, all Ferguson Shareholders will hold an identical number of shares of New TopCo Common Stock as the number of Ferguson Shares they held prior to the Merger. New TopCo will be the direct or indirect owner of all the assets and liabilities of Ferguson following the Merger.

 

Q.	IS THERE ANY RESTRICTION ON SELLING FERGUSON SHARES PRIOR TO COMPLETION OF THE MERGER?

 

A:

No. Ferguson Shares will continue to trade on the NYSE and the LSE up to and including the Effective Time. Following the Effective Time, the New TopCo Common Stock is expected to be listed on the NYSE and the LSE. Generally speaking, holders of Ferguson Shares may sell their shares for cash at any time up to and including the Effective Time.

 

Q.	HOW WILL THE MERGER AFFECT THE PUBLIC DISCLOSURE FERGUSON PROVIDES TO ITS SHAREHOLDERS?

 

A:

Upon completion of the Merger, New TopCo will be subject to the same reporting requirements of the SEC, the mandates of the Sarbanes-Oxley Act of 2002 and the applicable corporate governance rules of the NYSE as Ferguson plc before the Merger. New TopCo will be required to file periodic reports with the SEC on Forms 10-K, 10-Q and 8-K and comply with the proxy rules applicable to U.S. domestic issuers. In addition, as a company listed on the LSE, New TopCo will be subject to the same U.K. reporting and corporate governance requirements as Ferguson plc before the Merger, including, for example, certain requirements under the U.K. Listing Rules, the DTR and the U.K. Market Abuse Regulation.

 

Q.	WHAT HAPPENS TO OUTSTANDING FERGUSON COMPENSATION AND BENEFIT PLANS IN CONNECTION WITH THE MERGER?

 

A:

In connection with the Merger, New TopCo will assume or, as applicable, substitute with substantially similar entitlements, all compensation or benefit plans, policies and arrangements previously maintained by Ferguson plc. With respect to Ferguson plc’s equity incentive plans, New TopCo will assume the Assumed Ferguson Employee Share Plans and all outstanding incentive awards issued thereunder. Each outstanding Ferguson plc incentive award previously granted under the Assumed Ferguson Employee Share Plans will be converted to an equivalent New TopCo incentive award. The incentive awards granted by New TopCo as a result of such conversion will be subject to substantially the same terms and conditions as the previously held Ferguson plc incentive awards, except, in the case of equity-based Ferguson plc incentive awards, the security issuable upon exercise or settlement of the relevant New TopCo incentive award, as applicable, will be New TopCo Common Stock (or its cash equivalent) rather than Ferguson Shares (or their cash equivalent).

 

viii

Q.	ARE THERE ANY CONDITIONS TO COMPLETING THE MERGER?

 

A:	Yes. Under the Merger Agreement the Merger is conditioned upon:

 

•

Ferguson having given notice to all of its creditors (if any) in accordance with Article 127FC(1) of the Jersey Companies Law and having published the contents of such notice in accordance with Article 127FC(5) of the Jersey Companies Law, and each applicable date as set out in Article 127FJ(3) of the Jersey Companies Law having passed;

 

•

Merger Sub having given notice to all of its creditors (if any) in accordance with Article 127FC(1) of the Jersey Companies Law and having published the contents of such notice in accordance with Article 127FC(5) of the Jersey Companies Law, and each applicable date as set out in Article 127FJ(3) of the Jersey Companies Law having passed;

 

•

the date as set out in Article 127FJ(3)(a) of the Jersey Companies Law having passed (if applicable);

 

•

the delivery to the registrar of companies in Jersey of all documents required in accordance with Article 127FJ of the Jersey Companies Law for the purposes of effecting the Merger;

 

•

no order by any court or other tribunal of competent jurisdiction will have been entered and will continue to be in effect and no law will have been adopted or be effective, in each case that temporarily or permanently prohibits, enjoins or makes illegal the consummation of the Merger;

 

•

no suit, action or proceeding will have been brought by any governmental entity, and remain pending, that seeks an order that would prohibit, enjoin or make illegal the consummation of the Merger;

 

•

all material consents and authorizations of, filings or registrations with, and notices to, any governmental or regulatory authority required to consummate the Merger, have been obtained or made;

 

•

Ferguson Shareholders will have approved the Merger in accordance with Ferguson Governing Documents and the Jersey Companies Law, as further described in this proxy statement/prospectus;

 

•

Merger Sub will have approved the Merger in accordance with Merger Sub’s memorandum of association and articles of association and the Jersey Companies Law;

 

•

the filing and approval of a U.K. prospectus with respect to the New TopCo Common Stock by the FCA and such U.K. prospectus having been made available to the public in accordance with the Prospectus Regulation Rules of the FCA; and

 

•

the registration statement on Form S-4, to which this proxy statement/prospectus forms a part, with respect to the New TopCo Common Stock to be issued pursuant to the Merger will be effective, and there will be no stop order suspending such effectiveness.

 

Q:	WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?

 

A:

It is currently anticipated that the Merger will be consummated on August 1, 2024, subject to the approval of the Merger Proposal by the Ferguson Shareholders. However, we cannot assure you of when or if the Merger will be completed. It is possible that factors outside of the control of Ferguson could result in the Merger being completed at a different time or not at all. Ferguson must first obtain the approval of Ferguson Shareholders for the Merger Proposal, and Ferguson, Merger Sub and New TopCo must also satisfy other closing conditions.

 

Q:	WILL THE BUSINESS OF FERGUSON CHANGE FOLLOWING THE MERGER?

 

A:	No. New TopCo will continue to pursue Ferguson’s current strategic initiatives and business operations.

 

Q:	WILL THE NEW TOPCO COMMON STOCK HAVE THE SAME IDENTIFICATION NUMBERS AS THE FERGUSON SHARES?

 

A:

Following the Merger, the New TopCo Common Stock will have different identification numbers than the Ferguson Shares, which include Committee on Uniform Security Identification Procedures (“CUSIP”) and International Securities Identification Number (“ISIN”) identifiers. The New TopCo Common Stock will have the CUSIP number    and ISIN     . Additionally, New TopCo Common Stock will be registered on the LSE with ISIN    and stock exchange daily official list (“SEDOL”) number    . However, when admitted to trading on the NYSE and the LSE, the New TopCo Common Stock is still expected trade under the symbol “FERG.”

 

ix

Q:	WILL THE DIVIDEND POLICY OF NEW TOPCO BE DIFFERENT FROM THE DIVIDEND POLICY FERGUSON PLC?

 

A:

No. Following the completion of the Merger, the New TopCo Board anticipates that cash dividends will be paid on a quarterly basis in amounts comparable to dividends paid by Ferguson plc in prior periods as permitted by the DGCL. There are expected to be no changes in Ferguson’s current dividend policy prior to the completion of the Merger.

 

Q:	WHO WILL BE THE DIRECTORS AND EXECUTIVE OFFICERS OF NEW TOPCO FOLLOWING THE MERGER?

 

A:

The persons who currently serve as the directors and executive officers of Ferguson plc (other than Ms. Sammie Long, who will retire from her position at Ferguson plc, effective July 31, 2024) are expected to serve as the directors and executive officers of New TopCo following the Merger, subject to the appointment, death, resignation or removal of any directors or executive officers on or prior to the Effective Time. See “Management of New TopCo” for additional information.

 

Q:	WHAT ARE THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER FOR SHAREHOLDERS?

 

A:

As discussed more fully under “Material U.S. Federal Income Tax Considerations,” it is intended that the Merger will constitute either a “reorganization” within the meaning of Section 368(a) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), or a tax-free transaction within the meaning of Section 351 of the Code, or both. Assuming the Merger so qualifies, U.S. Holders (as defined in “Material U.S. Federal Income Tax Considerations—U.S. Holders”) generally will not recognize gain or loss as a result of the Merger, which for U.S. federal income tax purposes would be treated as a deemed exchange of Ferguson Shares (including Ferguson Shares underlying U.K. DIs) for New TopCo Common Stock. A U.S. Holder’s aggregate tax basis in New TopCo Common Stock received pursuant to the Merger will equal the U.S. Holder’s aggregate tax basis in the Ferguson Shares (including Ferguson Shares underlying U.K. DIs) exchanged therefor.

Non-U.S. Holders (as defined in “Material U.S. Federal Income Tax Considerations—Non-U.S. Holders”) generally will not be subject to U.S. federal income tax on any gain realized on the exchange of Ferguson Shares (including Ferguson Shares underlying U.K. DIs) and the issuance of New TopCo Common Stock in the Merger. A Non-U.S. Holder generally will not recognize any loss realized on the exchange of Ferguson Shares (including Ferguson Shares underlying U.K. DIs) and the issuance of New TopCo Common Stock in the Merger for U.S. federal income tax purposes.

Additionally, the Merger may cause Non-U.S. Holders to become subject to U.S. federal income withholding taxes on any amounts treated as dividends paid in respect of such Non-U.S. Holder’s New TopCo Common Stock after the Merger. In general, any distributions made to a Non-U.S. Holder with respect to New TopCo Common Stock, to the extent paid out of New TopCo’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with such Non-U.S. Holder’s conduct of a trade or business within the U.S. (and, if required by an applicable income tax treaty, attributable to a U.S. permanent establishment or fixed base maintained by such Non-U.S. Holder), will be subject to withholding tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, as applicable). Dividends paid by New TopCo to a Non-U.S. Holder that are effectively connected with such Non-U.S. Holder’s conduct of a trade or business within the U.S. (and, if required by an applicable income tax treaty, attributable to a U.S. permanent establishment or fixed base maintained by such Non-U.S. Holder) will generally not be subject to U.S. federal withholding tax, provided such Non-U.S. Holder complies with certain certification and disclosure requirements (usually by providing an IRS Form W-8ECI). Instead, such dividends will generally be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders. If the Non-U.S. Holder is a corporation, dividends that are effectively connected income may also be subject to a “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty).

The tax consequences of the Merger are complex and will depend on a holder’s particular circumstances. All holders should consult their tax advisors regarding the tax consequences to them of the Merger, including the applicability and effect of U.S. federal, state, local and non-U.S. tax laws. For a more complete discussion of the material U.S. federal income tax considerations of the Merger, see “Material U.S. Federal Income Tax Considerations.”

 

x

Q:	WHAT ARE THE MATERIAL U.K. TAX CONSEQUENCES OF THE MERGER FOR SHAREHOLDERS?

 

A:

As discussed more fully under “Material U.K. Tax Considerations”, the Merger should not be treated as involving a distribution subject to U.K. tax as income, and the Merger should be treated as a reorganization of share capital for the purposes of U.K. taxation of chargeable gains (“U.K. CGT”). Accordingly, U.K. Holders (as defined in “Material U.K. Tax Considerations”) who receive New TopCo Common Stock should not be treated as making a disposal of all or part of their holding of Ferguson Shares and no liability to U.K. CGT should arise. Instead, the New TopCo Common Stock acquired and the Ferguson Shares which cease to exist should, for U.K. CGT purposes, be treated as the same asset and as having been acquired at the same time as the Ferguson Shares.

The tax consequences of the Merger are complex and will depend on a holder’s particular circumstances. All holders should consult their tax advisors regarding the tax consequences to them of the Merger. For a more complete discussion of the material U.K. tax considerations of the Merger, see “Material U.K. Tax Considerations.”

 

Q:	WHAT WILL HAPPEN TO FERGUSON IF, FOR ANY REASON, THE MERGER IS NOT COMPLETED?

 

A:

If for any reason the Merger is not completed, the ultimate parent company of the Ferguson group of companies would still be Ferguson plc, a public limited company in Jersey, and Ferguson Shares would continue to be listed on the NYSE and the LSE under the trading symbol “FERG,” subject to compliance with NYSE and LSE continued listing requirements.

 

Q:	WHERE CAN I FIND MORE INFORMATION ABOUT FERGUSON AND THE MERGER?

 

A:	You can find out more information about Ferguson, the Merger Agreement and the transactions contemplated thereby, including the Merger, by reading this proxy statement/prospectus and from various sources described in the section entitled “Where You Can Find More Information.”

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING

 

Q:	WHY AM I RECEIVING THIS PROXY STATEMENT/PROSPECTUS?

 

A:

You are receiving this proxy statement/prospectus and accompanying materials because you are a registered shareholder or beneficially own Ferguson Shares as of April [●], 2024 (the “Record Date”) and are entitled to vote at the Special Meeting. The Ferguson Board has made these materials available to you in connection with the Ferguson Board’s solicitation of proxies on behalf of Ferguson for use at the Special Meeting.

The Merger cannot be completed unless Ferguson Shareholders approve the Merger Proposal set forth in this proxy statement/prospectus. With respect to the Advisory Organizational Documents Proposals, although Ferguson is seeking a shareholder vote on such Proposals, a vote for each such Proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board, and approval of such Proposals is also not a condition to the closing of the Merger. However, Ferguson values the opinions expressed by shareholders and will consider the outcome of the vote on the Advisory Organizational Documents Proposals when making future decisions relating to the corporate governance practices of New TopCo.

 

Q:	WHEN AND WHERE IS THE SPECIAL MEETING?

 

A:	The Special Meeting will be held at [10:00 a.m.] Eastern Time ([3:00 p.m.] U.K. Time), on [May 30], 2024, at the offices of Freshfields Bruckhaus Deringer LLP, located at 100 Bishopsgate, London, EC2P 2SR, U.K.

 

Q:	WHO MAY ATTEND AND VOTE?

 

A:

Registered shareholders. Ferguson, pursuant to Article 186(b) of the Ferguson Articles, has specified that only those persons entered on the register of members of Ferguson as of the Record Date (or, if the Special Meeting is adjourned, on the register of members of Ferguson not less than 10 days nor more than 60 days before the time of the adjourned meeting) are entitled to attend and vote at the Special Meeting. Subsequent changes to the entries on the register of members of Ferguson plc after the Record Date will be disregarded in determining the rights of any person to attend or vote at the Special Meeting. In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders. Seniority is determined by the order in which the names of the holders stand in the register. Registered shareholders must present photographic identification to attend and vote at the Special Meeting. All joint shareholders may attend and speak. Any corporate entity which is a shareholder can appoint one or more representatives who may exercise all of its powers on its behalf. See “—Can a corporate shareholder appoint a representative to act on its behalf at the Special Meeting?” below for more information.

 

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Beneficial owners. If your shares are held in a stock brokerage account or by a broker, bank or other nominee, you are considered the beneficial owner of the shares, and this proxy statement/prospectus is being made available or forwarded to you by or on behalf of your broker, bank or other nominee. Only those beneficial owners holding shares as of the Record Date or, if the Special Meeting is adjourned, on such other date as is communicated to beneficial owners are entitled to vote on the resolutions in respect of such shares. As a beneficial owner, if you wish to attend or vote at the Special Meeting, you must obtain a legal proxy from your broker, bank or other nominee and present it, along with photographic identification, to Ferguson’s Company Secretary or other Ferguson representative, at the Special Meeting.

U.K. Depositary Interest (“U.K. DI”) Holders. If you are a holder of Ferguson plc U.K. DIs (a “U.K. DI Holder”) entered on the register of U.K. DI Holders of Ferguson as of 6:00 p.m. U.K. Time on [May 23], 2024 (or, if the Special Meeting is adjourned, on such other date as is communicated to U.K. DI Holders), you are entitled to provide voting instructions to the Depositary in respect of the number of U.K. DIs registered in your name at that time. As a U.K. DI Holder, or as a representative of a U.K. DI Holder, if you wish to attend or vote at the Special Meeting, please inform the Depositary at csnditeam@computershare.co.uk. The Depositary will then provide you with a Letter of Representation with respect to the relevant U.K. DI holding that will enable a U.K. DI Holder, or a representative, to attend, speak and vote the shares underlying those interests at the Special Meeting. The completed Letter of Representation must be delivered to a Depositary representative by 10:00 a.m. U.K. Time on [May 23], 2024. To attend, speak or vote at the Special Meeting, you must bring this Letter of Representation and present it, along with photographic identification, to Ferguson’s Company Secretary or other Ferguson representative at the Special Meeting. Any U.K. DI Holders that do not follow the above process will be unable to represent their position in person at the Special Meeting.

 

Q:	HOW DO I VOTE?

 

A:	Registered shareholders. Registered shareholders may vote by proxy before the Special Meeting using one of the following three methods or may attend the Special Meeting and vote in person by ballot:

 

1.

by internet at www.proxyvote.com using the 16-digit control number (your “Control Number”) set out on the proxy card you received and following the instructions on the website;

 

2.

by telephone at 1-800-690-6903 using your Control Number and following the recorded instructions (international charges apply outside of the U.S. and Canada); or

 

3.

by mail by following the instructions on your proxy card and returning your completed proxy card in the postage-paid envelope accompanying your proxy materials.

In each case, your vote by internet or telephone or your completed proxy card must be received by 11:59 p.m. Eastern Time on [May 27], 2024 (4:59 a.m. U.K. Time on [May 28], 2024).

Your proxy card must be signed and dated by you, or your attorney duly authorized in writing or, if you are a corporate shareholder, must be executed under your company common seal or under the hand of a duly authorized officer or attorney of your company or in any other manner authorized by your company’s constitution. Any power of attorney or any other authority (if any) under which the proxy card is executed (or a duly certified copy of such power or authority) must be submitted with the proxy card. In the case of joint holders (i) only one need sign, and (ii) the vote of the senior holder who tenders a vote, whether in person or by proxy, will alone be counted. Seniority is determined as described above under “—Who May Attend and Vote?”.

If you are a holder based in the U.K., you may return your proxy card(s) in the U.K. by following the instructions on the proxy card.

Beneficial owners. Beneficial owners may direct their broker, bank or other nominee on how to vote their shares by following the instructions for voting on the voting instruction form provided by your broker, bank or other nominee. If you do not direct your broker, bank or other nominee on how to vote your shares by following the instructions on your voting instruction form, your shares will not be voted at the Special Meeting as we believe that under the rules of the NYSE all matters presented at the Special Meeting will be considered “non-routine” and your broker will not have discretionary authority to vote your shares on any of these matters. Accordingly, we encourage you to communicate your voting decisions to your broker, bank or other nominee by the time prescribed by your broker, bank or other nominee and well in advance of the deadline for voting of 11:59 p.m. Eastern Time on [May 27], 2024 (4:59 a.m. U.K. Time on [May 28], 2024) to ensure that your vote will be counted. If you wish to vote in person by ballot at the Special Meeting, you must obtain a legal proxy from your broker, bank or other nominee as described above under “—Who May Attend and Vote?”.

 

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U.K. DI Holders. U.K. DI Holders may direct the Depositary to vote the shares represented by their U.K. DIs in three ways:

 

1.

By internet-Instruct Computershare. Complete a Form of Instruction accessible via the internet on the Depositary’s website by visiting www.eproxyappointment.com. You will need your Control Number, your Shareholder Reference Number and your unique PIN, which are available on the Form of Instruction that U.K. DI Holders will have received in the mail. Instructions must be received by 3:00 p.m. U.K. Time on [May 23], 2024.

 

2.

By internet-CREST. Issue an instruction through the CREST electronic voting appointment service using the procedures described in the CREST manual (available from www.euroclear.com). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider, should refer to their CREST sponsor or voting services provider, who will be able to take the appropriate action on their behalf.

For instructions made using the CREST service to be valid, the appropriate CREST message (a “CREST Voting Instruction”) must be properly authenticated in accordance with the specifications of Euroclear U.K. & International Limited (“EUI”) and must contain the information required for such instructions, as described in the CREST manual. The message, regardless of whether it relates to the voting instruction or to an amendment to the instruction given to the Depositary, must be transmitted so as to be received by Ferguson’s agent (ID 3RA50) no later than 3:00 p.m. U.K. Time on [May 24], 2024. The time of receipt will be taken to be the time (as determined by the timestamp applied to the CREST Voting Instruction by the CREST applications host) from which Ferguson’s agent is able to retrieve the CREST Voting Instruction by enquiry to CREST in the manner prescribed by CREST.

EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations apply to the transmission of a CREST Voting Instruction. It is the responsibility of the CREST member to take (or to procure that the CREST sponsor or voting service provider takes) such action necessary to ensure that a CREST Voting Instruction is transmitted by any particular time. CREST members and, where applicable, their CREST sponsors or voting service providers, are referred to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. Ferguson may treat as invalid a CREST Voting Instruction in the circumstances set out in Regulation 35 of the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755).

 

3.

By mail. Complete and return a Form of Instruction to the Depositary using the reply-paid envelope that accompanied the Form of Instruction or by posting it to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ, U.K. To be effective, all Forms of Instruction must be received by Computershare U.K. by 3:00 p.m. U.K. Time on [May 23], 2024. Computershare U.K., as your proxy, will then make arrangements to vote your underlying shares according to your instructions.

 

Q:	WHAT IS A PROXY?

 

A:

By appointing a proxy, you authorize a specified person or persons (known as your proxy or proxies) to vote your shares on your behalf at the Special Meeting in the way that you instruct on the proxy appointment form. A proxy may exercise all of your rights to attend, speak and vote at the Special Meeting. A proxy need not be a Ferguson Shareholder. By use of a proxy, you can vote, whether or not you attend the Special Meeting. All shares represented by valid proxy appointments received and not revoked before the Special Meeting will be voted in accordance with the Ferguson Shareholder’s specific voting instructions. If Ferguson has received your executed proxy card and you have not given specific voting instructions, your shares will be voted as recommended by the Ferguson Board and in the discretion of your proxy upon such other matters as may properly come before the Special Meeting. You are strongly encouraged to appoint the Chair of the Special Meeting as your proxy. If you execute and return your proxy card without appointing a different proxy, the Chair of the Special Meeting will be deemed to be your proxy. This ensures that your vote will be counted if you are not able to attend the Special Meeting.

 

Q:	CAN I APPOINT MORE THAN ONE PROXY?

 

A:	You can appoint more than one proxy to exercise the rights attached to different shares held by you. To appoint more than one proxy, follow the instructions on your proxy card.

 

Q:	WHEN IS THE DEADLINE TO APPOINT A PROXY?

 

A:	The appointment of a proxy must be received not later than 11:59 p.m. Eastern Time on [May 27], 2024 (4:59 a.m. U.K. Time on [May 28], 2024), or 48 hours before the time appointed for holding any adjourned meeting.

 

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Q:	HOW DO I REVOKE MY PROXY OR CHANGE MY VOTE?

 

A:

Registered shareholders. Registered shareholders may revoke their proxies or change their voting instructions by submitting a new proxy appointment via internet, telephone or mail that is dated later than the original proxy or by delivering written notice of revocation to Ferguson’s Company Secretary, which revocation or change must be received by 11:59 p.m. Eastern Time on [May 27], 2024 (4:59 a.m. U.K. Time on [May 28], 2024). If you are a registered shareholder, you may also revoke your proxies or change your vote by voting online at www.proxyvote.com or in person by ballot during the Special Meeting, in either case before the poll is closed. If more than one properly executed proxy appointment form is returned in respect of the same holding of shares, either by paper or by electronic communication (except as described above under “—Can I appoint more than one proxy?”), the proxy appointment form received last by Broadridge Financial Solutions, Inc. (“Broadridge”) before the latest time for the receipt of such proxies will take precedence.

Beneficial owners. Beneficial owners should contact their broker, bank or other holder of record for instructions on how to revoke their proxies or change their vote.

U.K. DI Holders. U.K. DI Holders should contact the Depositary for instructions on how to revoke their proxies or change their vote.

 

Q:	HOW WILL RESOLUTIONS BE DECIDED?

 

A:	All resolutions at the Special Meeting will be decided by a poll. Ferguson believes that this is a more transparent and equitable method of voting, as shareholder votes are counted according to the number of shares held, ensuring an exact and definitive result.

 

Q:	WHAT CONSTITUTES A “QUORUM” FOR THE SPECIAL MEETING?

 

A:

A Ferguson Shareholder who holds, or Ferguson Shareholders together who hold, a majority of the shares entitled to be voted at the Special Meeting, present in person or represented by proxy, will constitute a quorum. A quorum is necessary to conduct business at the Special Meeting. You are part of the quorum if you have timely returned a properly executed proxy appointment form. Abstentions also are counted in determining whether a quorum is present.

 

Q:	CAN I ASK QUESTIONS AT THE SPECIAL MEETING?

 

A:

Yes. All Ferguson Shareholders and their proxies can ask questions at the Special Meeting. Ferguson will answer questions relating to the business being dealt with at the Special Meeting only. No question will be answered that would interfere unduly with the conduct of the Special Meeting, involve the disclosure of confidential information, or not be in the interests of Ferguson or the good order of the Special Meeting.

The Chair of the Special Meeting may also nominate a Ferguson representative to answer a specific question after the Special Meeting.

 

Q:	HOW CAN I OBTAIN ADDITIONAL COPIES OF THE PROXY STATEMENT/PROSPECTUS AND RELATED MATERIALS?

 

A:

If you would like additional copies of the proxy statement/prospectus or any of the documents (excluding exhibits, unless these are specifically incorporated by reference) incorporated by reference into this proxy statement/prospectus, without charge, please contact Ferguson’s Company Secretary by mail at Ferguson plc, Attn: Company Secretary, 1020 Eskdale Road, Winnersh Triangle, Wokingham, Berkshire, RG41 5TS, U.K.; by email at investor@ferguson.com; or by telephone at +44 (0) 118 927 3800. In order to receive timely delivery of the documents in advance of the Special Meeting, you must make your request for information no later than [May 22], 2024 (five business days prior to the date of the Special Meeting). We will promptly deliver to you the documents that you request.

In addition, you may request to receive a free printed or email copy of the proxy statement/prospectus and any related materials from Broadridge by internet at www.proxyvote.com, email to sendmaterial@proxyvote.com, or telephone at 1-800-579-1639. Please have your Control Number available and, if you are sending an email, please include your Control Number in the subject line.

 

Q:	WHO CAN I CONTACT FOR FURTHER INFORMATION ABOUT THE SPECIAL MEETING?

 

A:

Information regarding the Special Meeting, including a copy of this proxy statement/prospectus, can be found on the Investors tab of our website under Shareholder Center. If you have questions about the Special Meeting, please contact Computershare by email at web.queries@computershare.com or by telephone at 1-866-742-1064.

 

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Q:	WHO CAN I CONTACT FOR GENERAL INFORMATION ABOUT MY SHAREHOLDINGS?

 

A:

Computershare maintains Ferguson’s share register. If you have any questions about the Ferguson Shares that you hold or you would like to notify Ferguson regarding a change of address, you may contact Computershare: by telephone to 1-866-742-1064 (from the U.S. and Canada), Shareholder Services or 0370 703 6203 (from the U.K.), and 1-781-575-3023 (from outside the U.K., U.S. and Canada); or in writing to: Computershare, P.O. Box 43078, Providence RI 02940-3078, United States. The telephone lines are open from 9:00 a.m. to 5:00 p.m. Eastern Time each business day.

 

Q:	WHO PAYS FOR SOLICITATION OF PROXIES?

 

A:

Ferguson is paying the cost of soliciting proxies. Ferguson has hired Morrow Sodali to assist in the proxy solicitation process. Ferguson will pay Morrow Sodali approximately $15,000 for its proxy solicitation services, plus reasonable out-of-pocket expenses incurred in the process of solicitating proxies. In addition, Ferguson will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for sending proxy materials to shareholders and obtaining their proxies. Furthermore, proxies may be solicited by Ferguson’s directors, officers and associates, in each case without any additional compensation.

 

Q:	WHAT IF I HAVE BEEN NOMINATED BY A SHAREHOLDER TO HAVE INFORMATION RIGHTS UNDER THE FERGUSON ARTICLES?

 

A:

Any person to whom this proxy statement/prospectus is sent who is not a Ferguson Shareholder but is a person nominated by a Ferguson Shareholder under Article 68 of the Ferguson Articles to enjoy information rights (a “nominated person”) may, under an agreement between such nominated person and the Ferguson Shareholder by whom such nominated person was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Special Meeting. If a nominated person has no such proxy appointment right or does not wish to exercise it, the nominated person may, under any such agreement, have a right to give instructions to the Ferguson Shareholder as to the exercise of voting rights. Your rights in relation to the appointment of proxies described above do not apply to nominated persons and can only be exercised by you.

 

Q:	CAN A CORPORATE SHAREHOLDER APPOINT A REPRESENTATIVE TO ACT ON ITS BEHALF AT THE SPECIAL MEETING?

 

A:

Any corporation that is a registered Ferguson Shareholder may appoint one or more persons to act as its representative at the Special Meeting. Such representative may exercise all of the corporation’s powers on its behalf, provided that if two or more representatives purport to exercise any power (including any vote) in respect of the same shares (in the case of multiple corporate representatives, by reference to the shares in respect of which they are appointed):

 

(a)

if they purport to exercise the power in the same way as each other, the power is treated as exercised in that way; and

 

(b)

in other cases, the power is treated as not exercised.

Any such representative should bring to the Special Meeting written evidence of their appointment, such as a certified copy of a board resolution or a letter from the corporation concerned confirming the appointment, along with photographic identification.

 

Q:	HOW MANY SHARES ARE OUTSTANDING?

 

A:

As of    , 2024, being the latest practicable date prior to the publication of this proxy statement/prospectus, Ferguson’s issued share capital consisted of    ordinary shares, of which     shares were held in treasury. Each ordinary share carries one vote, except for treasury shares which are non-voting. Therefore, the total voting rights in Ferguson was    .

 

Q:	WHAT AM I BEING ASKED TO VOTE ON AND WHY IS THIS APPROVAL NECESSARY?

 

A:	You are being asked to vote on a Merger Proposal and eight separate Advisory Organizational Documents Proposals (collectively, or as a subset thereof, as applicable, the “Proposals”):

 

•

A proposal to approve the Merger Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, and approve the transactions contemplated thereby. Your approval of the Merger Proposal will constitute your approval of the Merger Agreement and the transactions contemplated thereby, including the Merger. See the section entitled “Proposal No. 1—The Merger Proposal.”

 

xv

•

Eight separate Proposals, on an advisory basis, with respect to certain differences between the Ferguson Governing Documents and New TopCo Proposed Organizational Documents (each to be effective upon the Merger), which are being presented separately in accordance with SEC guidance to give Ferguson Shareholders the opportunity to present their views on important corporate governance provisions. See the section entitled “Proposal No. 2—The Advisory Organizational Documents Proposals.”

Ferguson will hold the Special Meeting to consider and vote upon the Proposals. The consummation of the Merger is conditioned on the approval of the Merger Proposal. With respect to the Advisory Organizational Documents Proposals, although Ferguson is seeking a shareholder vote on such Proposals, a vote for each such Proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board, and approval of such Proposals is also not a condition to the closing of the Merger. However, Ferguson values the opinions expressed by shareholders and will consider the outcome of the vote on the Advisory Organizational Documents Proposals when making future decisions relating to the corporate governance practices of New TopCo.

This proxy statement/prospectus contains important information about the Merger and the other matters to be acted upon at the Special Meeting. You should read this proxy statement/prospectus carefully and in its entirety, including the annexes attached hereto and the documents referred to herein.

Your vote is important. You are encouraged to vote as soon as possible after carefully reviewing this proxy statement/prospectus.

 

Q:	WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AT THE SPECIAL MEETING?

 

A:	The following votes are required for each proposal at the Special Meeting:

 

•

The Merger Proposal: The Merger Proposal is proposed as a special resolution, which means that for this resolution to be passed at least two-thirds (662/3%) of the total number of votes cast on this resolution must be cast in favor of this resolution. Your approval of the Merger Proposal will constitute your approval of the Merger Agreement and the transactions contemplated thereby, including the Merger.

 

•

The Advisory Organizational Documents Proposals: Each of the Advisory Organizational Documents Proposals are being proposed separately, on an advisory basis, as an ordinary resolution, which means that for each resolution to be passed more than half of the votes cast must be cast in favor of such resolution.

 

Q:	DO I HAVE DISSENTERS’ RIGHTS IF I OBJECT TO THE MERGER PROPOSAL?

 

A:

Yes. Pursuant to Article 127FB of the Jersey Companies Law, following the approval by Ferguson Shareholders of the Merger, you have the right to apply to the Royal Court on the grounds that the Merger would unfairly prejudice your interests. An application to the Royal Court objecting to the Merger may not be made (i) more than 21 days after the Merger has been approved by the Ferguson Shareholders or (ii) if you voted in favor of the Merger.

On an application to the Royal Court in objection of the Merger, the court may, if satisfied that such application is well-founded, make an order as it thinks fit for giving relief in respect of the matters complained of. Such order will typically be tailored to the relief sought by the applicant but may include a restraint on the Merger, impose conditions on the Merger or provide for the purchase of the shares of the applicant Ferguson Shareholder by other members of Ferguson or Ferguson itself.

 

Q:	WHAT IF I ATTEND THE SPECIAL MEETING AND ABSTAIN OR DO NOT VOTE?

 

A:	For purposes of the Special Meeting, an abstention occurs when you attend the meeting in person and do not vote or return a proxy with an “abstain” vote.

Abstentions will be counted for the purpose of determining the presence or absence of a quorum, but will not be counted for the purpose of determining the number of votes cast on a given proposal. If you attend the Special Meeting and you fail to vote on the Merger Proposal or the Advisory Organizational Documents Proposals, no votes attaching to your shares will be counted for the purposes of determining whether the resolutions are passed, so that your failure to vote will have no effect on the Proposals. If you hold Ferguson Shares directly and sign and return your proxy card without indicating how to vote on any particular Proposal, the Ferguson Shares represented by your proxy will be voted “FOR” each of the Proposals presented at the Special Meeting and in the discretion of your proxy upon such other matters as may properly come before the Special Meeting.

 

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Q:	WHAT HAPPENS IF I FAIL TO TAKE ANY ACTION WITH RESPECT TO THE SPECIAL MEETING?

 

A:

If you fail to take any action with respect to the Special Meeting and the Merger is approved by Ferguson Shareholders and consummated, you will become a stockholder of New TopCo. If you fail to take any action with respect to the Special Meeting and the Merger is not approved and consummated, you will continue to be a Ferguson Shareholder.

 

Q:	HOW CAN I FIND OUT THE VOTING RESULTS OF THE SPECIAL MEETING?

 

A:	Voting results are expected to be announced in a Current Report on Form 8-K that Ferguson will file with the SEC on the first business day following the Special Meeting.

 

Q:	WHO CAN HELP ANSWER MY QUESTIONS?

 

A:	If you have questions about the Merger or any of the Proposals or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact:

Morrow Sodali LLC

333 Ludlow St^. 5^th Floor, South Tower

Stamford, Connecticut 06902

Shareholders may call toll free: 800-662-5200 (from the U.S. and Canada); 203-658-9400 (from the U.K.),

and 203-658-9400 (from outside the U.S., Canada and U.K.)

Banks and Brokers may call collect: 203-658-9400

ferg.info@investor.morrowsodali.com

You may also obtain additional information about Ferguson from documents filed with the SEC. See the section entitled “Where You Can Find More Information.” If you have questions regarding the certification of your Ferguson Share position, please contact:

Computershare Trust Company N.A.

P.O. Box 43078

Providence, RI 02940-3078, United States

1-866-742-1064 (U.S. and Canada); 1-781-575-3023 (outside U.S. and Canada)

Email: web.queries@computershare.com.

 

 

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MARKET PRICE AND DIVIDEND INFORMATION

Market information

The principal U.S. trading market for Ferguson Shares is the NYSE, where Ferguson Shares are traded under the symbol “FERG.” Ferguson’s principal foreign public trading market for Ferguson Shares is the LSE, where Ferguson Shares are traded under the symbol “FERG.” We expect the New TopCo Common Stock to also be traded under the symbol “FERG” on the NYSE and LSE following the completion of the Merger.

Holders

As of February 15, 2024 there were 4,182 holders of record of Ferguson Shares.

As of February 15, 2024 there were 3 stockholders of New TopCo, Kevin Murphy, Bill Brundage and Ian Graham, who each own one share, or 33¹/₃% of outstanding shares of New TopCo Common Stock. On the terms of and subject to the conditions of the Merger Agreement, at the Effective Time, New TopCo will be the sole shareholder of Ferguson plc (which will be renamed Ferguson (Jersey) Limited at the Effective Time) and each existing share of New TopCo Common Stock issued and outstanding immediately prior to the Effective Time will be cancelled. In addition and simultaneously, (i) each Ferguson Share that is issued and outstanding at the Merger Record Time will automatically be cancelled without any repayment of capital and New TopCo will issue as consideration therefor new, duly authorized, validly issued, fully paid and non-assessable shares of New TopCo Common Stock to Ferguson Shareholders on a one-for-one basis for each Ferguson Share held by such Ferguson Shareholder immediately preceding the Merger Record Time and (ii) each U.K. DI representing an issued and outstanding Ferguson Share at the Merger Record Time will be cancelled and a New TopCo U.K. DI representing one share of New TopCo Common Stock will be issued through CREST by the Depositary as consideration therefor to each holder of U.K. DIs on a one-for-one basis for each U.K. DI held by such holder immediately preceding the Merger Record Time. See “Security Ownership of Certain Beneficial Owners and Management” for more information regarding beneficial ownership of Ferguson Shares and New TopCo Common Stock.

Dividend Policy

To date, New TopCo has not paid any dividends on the New TopCo Common Stock. Following the completion of the Merger, the New TopCo Board anticipates that cash dividends will be paid on a quarterly basis in amounts comparable to dividends paid by Ferguson plc in prior periods as permitted by the DGCL. There are expected to be no changes in Ferguson’s current dividend policy prior to the completion of the Merger.

 

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RISK FACTORS

You should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before deciding whether to vote or instruct your vote to be cast to approve the Proposals described in this proxy statement/prospectus. If the Merger is completed, Ferguson will become a wholly owned subsidiary of New TopCo, Merger Sub will cease to exist and you will become a stockholder of New TopCo. As a result of the Merger, the corporate law and governing documents governing Ferguson and the shares that will be held by you will be different. If any of the risks discussed below actually occur, the business, financial condition, operating results and cash flows of Ferguson, and/or New TopCo following the consummation of the Merger, could be materially adversely affected. The risks described below are not the only risks facing Ferguson or New TopCo and do not comprise all of the risks associated with an investment in New TopCo Common Stock. Additional risks and uncertainties not presently known to Ferguson or New TopCo or that Ferguson or New TopCo currently deem immaterial also may impair our business, financial condition and results of operations. In addition to the other information contained in this proxy statement/prospectus, including the matters addressed under the heading “Forward-Looking Statements and Risk Factors Summary,” you should carefully consider the following risk factors in deciding how to vote on the Proposals presented in this proxy statement/prospectus.

Risks Related to New TopCo

The rights of stockholders under Delaware law may differ from the rights of shareholders under Jersey law. Moreover, the City Code, which currently applies to Ferguson plc, will not apply to any takeover offer for New TopCo.

Currently, your rights as a Ferguson Shareholder arise under the laws of Jersey, as well as the Ferguson Governing Documents. Upon effectiveness of the Merger, your rights as a stockholder of New TopCo will arise under Delaware law, as well as the New TopCo Proposed Organizational Documents. The New TopCo Proposed Organizational Documents and Delaware law contain provisions that differ in certain respects from those in the Ferguson Governing Documents and Jersey law and, therefore, some of your rights as a shareholder will change. For instance, Delaware law provides that a certificate of incorporation may contain a provision eliminating or limiting the personal liability of directors and officers in certain circumstances. Accordingly, under the New TopCo Proposed Certificate of Incorporation, the directors and certain officers will not be personally liable to New TopCo or any of its stockholders for monetary damages for breach of fiduciary duty as a director or officer to the fullest extent permitted by the DGCL. Currently the DGCL does not permit exculpation for: (i) a director or officer for any breach of the director’s or officer’s duty of loyalty to New TopCo or its stockholders; (ii) a director or officer for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) a director for unlawful payment of dividends or unlawful stock repurchases or redemptions, as provided under Section 174 of the DGCL; (iv) a director or officer for any transaction from which the director or officer derived an improper personal benefit or (v) an officer in any action by or in the right of the corporation. However, Jersey law constrains the ability of Jersey companies to limit the liability of directors for breaches of duty. A Jersey company may only exempt from liability, and indemnify director and officers for liabilities incurred in defending proceedings where a judgment in favor of the director or officer is obtained or the director or officer is acquitted, proceedings are discontinued or settled (such that in the opinion of a majority of disinterested directors, the concerned director or officer was substantially successful on merits), to anyone other than the company if the director or officer acted in good faith with a view to the best interests of the company, in connection with judicial relief from liability for negligence, default, breach of duty or breach of trusts, or in a case in which the company normally maintains insurance for persons other than directors. Moreover, the City Code, which currently applies to Ferguson plc, will not apply to any takeover offer for New TopCo due to its incorporation in Delaware, meaning that, upon effectiveness of the Merger, Ferguson Shareholders will no longer be afforded the specific protections provided by the City Code. For a further description of your rights following the Merger and how they may differ from your current rights, please see “Comparison of Corporate Governance and Shareholder Rights.” All Ferguson Shareholders are encouraged to read each of the New TopCo Proposed Certificate of Incorporation and the New TopCo Proposed Bylaws, substantially in the form attached hereto as Annex B and Annex C, respectively.

Provisions in the New TopCo Proposed Certificate of Incorporation and New TopCo Proposed Bylaws under Delaware law could discourage another company from acquiring New TopCo and may prevent attempts by New TopCo stockholders to replace or remove its current management.

Provisions in the New TopCo Proposed Certificate of Incorporation and New TopCo Proposed Bylaws, which will become effective at the Effective Time, may discourage, delay or prevent a merger, acquisition or other change in control of New TopCo that certain stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for New TopCo Common Stock, thereby depressing the market price of New TopCo Common Stock. In addition, these provisions may

 

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frustrate or prevent any attempts by stockholders of New TopCo to replace or remove its current management by making it more difficult for stockholders to replace members of the New TopCo Board.

Among other things, these provisions:

 

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provide the New TopCo Board the right to issue one or more series of New TopCo Preferred Stock and to determine the price and other terms of those shares, including preferences and voting rights, without shareholder approval;

 

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authorize a number of shares of stock that are not yet issued, which would allow the New TopCo Board to issue shares to persons friendly to current management without offering pre-emptive rights to existing stockholders;

 

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permit the New TopCo Board to amend the New TopCo Proposed Bylaws, which may allow the New TopCo Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt;

 

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prohibit stockholders from taking action by written consent;

 

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provide the New TopCo Board with the sole authority to determine the number of directors of the New TopCo Board and to fill vacancies on the New TopCo Board (whether resulting from any increase in the authorized number of directors or otherwise); and

 

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establish advance notice and other requirements for nominations of candidates for election to the New TopCo Board or for proposing matters that can be acted on by stockholders at the annual or special meetings of stockholders.

As a Delaware corporation, New TopCo will be subject to provisions of Delaware law, including Section 203 of the DGCL. Section 203 of the DGCL provides (in general) that, unless certain conditions have been met, New TopCo may not engage in a business combination with an interested stockholder (generally defined as a stockholder of New TopCo, together with his or her affiliates or associates, who owns more than 15% of New TopCo’s voting stock) for a period of three years after the time of the transaction in which the person became an interested stockholder. The prohibition on business combinations with interested stockholders does not apply in some cases, including if: (1) the New TopCo Board, prior to the time of the transaction in which the stockholder became an interested stockholder, approves the business combination or the transaction in which the stockholder becomes an interested stockholder; (2) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock (excluding stock owned by certain persons) of New TopCo outstanding at the time the transaction commenced; or (3) at or after the time of the person became an interested stockholder, the New TopCo Board and the holders of at least two-thirds of the outstanding voting stock not owned by the interested stockholder approve, at an annual or special meeting of stockholders, and not by written consent, the business combination. Any provision of the New TopCo Proposed Certificate of Incorporation, the New TopCo Proposed Bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for New TopCo stockholders to receive a premium for their New TopCo Common Stock and affect the price that some investors are willing to pay for the New TopCo Common Stock.

The New TopCo Proposed Certificate of Incorporation provides that the Court of Chancery will be the exclusive forum for substantially all disputes between New TopCo and its stockholders, which could limit its stockholders’ ability to obtain a favorable judicial forum for disputes with New TopCo or its directors, officers, employees, agents or stockholders.

The New TopCo Proposed Certificate of Incorporation provides that, subject to certain exceptions, the Court of Chancery will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of New TopCo, (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) by, or other wrongdoing by, any current or former director, officer, employee, agent or stockholder of New TopCo to New TopCo or New TopCo’s stockholders, (iii) any action asserting a claim against New TopCo or any current or former director, officer, employee, agent or stockholder of New TopCo arising out of or relating to any provision of the DGCL, the New TopCo Proposed Certificate of Incorporation or the New TopCo Proposed Bylaws, (iv) any action to interpret, apply, enforce or determine the validity of the New TopCo Proposed Certificate of Incorporation or the New TopCo Proposed Bylaws, (v) any action asserting a claim against New TopCo or any current or former director, officer, employee, agent or stockholder of New TopCo governed by the internal affairs doctrine, (vi) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL or (vii) any action as to which the DGCL confers jurisdiction on the Court of Chancery. In addition, to prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, the New TopCo Proposed Certificate of Incorporation provides that, unless New TopCo consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the U.S. will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the U.S. Securities Act against New TopCo or any director,

 

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officer, employee or agent of New TopCo. However, Section 22 of the U.S. Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the U.S. Securities Act or the rules and regulations thereunder. Accordingly, both state and federal courts have jurisdiction to entertain such claims. Due to the concurrent jurisdiction for federal and state courts created by Section 22 of the U.S. Securities Act over all suits brought to enforce any duty or liability created by the U.S. Securities Act or the rules and regulations thereunder, there is uncertainty as to whether a court would enforce the exclusive forum provision.

These exclusive-forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with New TopCo or its directors, officers, employees, agents or stockholders and this limitation may have the effect of discouraging lawsuits or make New TopCo securities less attractive to investors. For example, stockholders who bring a claim in the Court of Chancery could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near the State of Delaware. The Court of Chancery may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to New TopCo than to its stockholders. Further, while the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring such a claim arising under the U.S. Securities Act against New TopCo, its directors, officers, employees, agents or stockholders in a venue other than in the federal district courts of the U.S. In such instance, New TopCo would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of the New TopCo Proposed Certificate of Incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and New TopCo cannot assure you that the provisions will be enforced by a court in those other jurisdictions. If a court were to find the exclusive-forum provisions in the New TopCo Proposed Certificate of Incorporation to be inapplicable or unenforceable in an action, New TopCo may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could harm New TopCo’s business.

The New TopCo Proposed Certificate of Incorporation provides that any person purchasing or otherwise acquiring or holding any interest in shares of capital stock of New TopCo shall be deemed to have notice of and to have consented to the exclusive forum provisions described above. However, these exclusive forum provisions may not apply to suits brought to enforce a duty or liability vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, such as those created by the U.S. Securities Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

Risks Related to the Merger

Failure to complete the Merger could negatively affect the stock price and the future business and financial results of Ferguson.

Completion of the Merger is subject to the satisfaction or waiver of several conditions precedent listed in the Merger Agreement, including the approval of the Merger Proposal by Ferguson Shareholders at the Special Meeting. Ferguson and New TopCo may not satisfy all of the closing conditions in the Merger Agreement. There can be no assurance that the conditions to the closing of the Merger will be satisfied or, where applicable, waived or that the Merger will be completed. If the closing conditions are not satisfied or waived, the Merger will not occur, or will be delayed pending later satisfaction or waiver, and such delay may cause Ferguson and New TopCo to lose some or all of the intended benefits of the Merger.

Furthermore, if the Merger is not completed for any reason, including as a result of Ferguson Shareholders failing to approve the Merger Agreement and the transactions contemplated thereby, without realizing any of the benefits of having completed the Merger, Ferguson may experience negative reactions from the financial markets, including negative impacts on its stock prices.

If the Merger fails to qualify as a “reorganization” within the meaning of Section 368(a) of the Code or tax-free exchange within the meaning of Section 351 of the Code, U.S. Holders (as defined in “Material U.S. Federal Income Tax Considerations—U.S. Holders”) may recognize taxable gain as a result of the Merger.

Ferguson intends for the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, a tax-free exchange within the meaning of Section 351 of the Code, or both (collectively, the “Intended Tax Treatment”), and Ferguson and New TopCo intend to file tax returns consistent with this Intended Tax Treatment. The position of Ferguson is not binding on the Internal Revenue Service (the “IRS”) or the courts, and Ferguson does not intend to request a ruling from the IRS with respect to the Merger. Accordingly, there can be no assurance that the IRS will not challenge the Intended Tax Treatment or that a court will not sustain such a challenge. If the IRS were to be successful in any such contention, or if for any other reason the Intended Tax Treatment were to not be respected for U.S. federal income tax purposes, the Merger could be a taxable event to the U.S. Holders. Ferguson Shareholders are urged to consult with their own tax advisors with respect to the tax consequences of the Merger.

 

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Following the Merger, Non-U.S. Holders (as defined in “Material U.S. Federal Income Tax Considerations—Non-U.S. Holders”) may be subject to U.S. federal income tax.

In general, any distributions made to a Non-U.S. Holder with respect to New TopCo Common Stock, to the extent paid out of New TopCo’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with such Non-U.S. Holder’s conduct of a trade or business within the U.S. (and, if required by an applicable income tax treaty, attributable to a U.S. permanent establishment or fixed base maintained by such Non-U.S. Holder), will be subject to withholding tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. Holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, as applicable). Dividends paid by New TopCo to a Non-U.S. Holder that are effectively connected with such Non-U.S. Holder’s conduct of a trade or business within the U.S. (and, if required by an applicable income tax treaty, attributable to a U.S. permanent establishment or fixed base maintained by such Non-U.S. Holder) will generally not be subject to U.S. federal withholding tax, provided such Non-U.S. Holder complies with certain certification and disclosure requirements (usually by providing an IRS Form W-8ECI). Instead, such dividends will generally be subject to U.S. federal income tax, net of certain deductions, at the same graduated individual or corporate rates applicable to U.S. Holders. If the Non-U.S. Holder is a corporation, dividends that are effectively connected income may also be subject to a “branch profits tax” at a rate of 30% (or such lower rate as may be specified by an applicable income tax treaty). For more information about the tax considerations with respect to such matters, see the section entitled “Material U.S. Federal Income Tax Considerations.”

Ferguson’s effective tax rate may increase in the future, including as a result of the Merger.

In connection with the Merger, Ferguson anticipates recognizing a one-time, non-cash deferred tax charge of between $75 million to $135 million upon shareholder approval of the Merger, driven by the elimination of certain pre-existing U.K. tax attributes of Ferguson. In addition, Ferguson anticipates that, following the Merger, the amount of taxable income which it generates in the U.K. may not be sufficient to fully realize the tax benefits associated with certain future expenses (including, without limitation, future contributions to Ferguson’s U.K. pension plans).

Apart from the one-time charge and certain future expenses discussed above, the Ferguson Board currently anticipates that the Merger on its own will have an immaterial impact on our effective tax rate, as tax reforms in the U.K. and Switzerland relating to global minimum tax policies are in any event expected to reduce the benefit of our current structure and increase our effective tax rate. However, following the Merger, the income of Ferguson will be subject to U.S. federal income tax as well as income tax in other jurisdictions. Currently applicable income tax laws, regulations, treaties and judicial and administrative interpretations of these laws, regulations and treaties in the U.S. and other jurisdictions may cause Ferguson’s effective tax rate to fluctuate significantly beyond our current projections. In light of these factors, there can be no assurance that Ferguson’s effective tax rate will not be materially affected in future periods.

Moreover, U.S. tax laws significantly limit Ferguson’s ability to redomicile outside of the U.S. once the Merger has been consummated. Accordingly, if Ferguson’s effective tax rate were to increase significantly as a result of the Merger, the business and financial performance of Ferguson could be adversely affected.

If the Merger fails to qualify for “reorganisation of share capital” treatment pursuant to Section 136 of the Taxation of Chargeable Gains Act 1992, U.K. Holders may recognize taxable gain as a result of the Merger.

Ferguson intends for the Merger to qualify as a “reorganisation of share capital” pursuant to Section 136 of the Taxation of Chargeable Gains Act 1992 for the purposes of U.K. taxation of chargeable gains (the “Intended U.K. CGT Treatment”). Ferguson has obtained statutory clearance from HMRC (under Section 138 of the Taxation of Chargeable Gains Act 1992) that HMRC are satisfied that the Merger will be effected for bona fide commercial reasons and will not form part of a scheme of arrangement of which the main purpose, or one of the main purposes, is avoidance of liability to U.K. CGT. However, while this statutory clearance confirms the non-application of certain anti-avoidance provisions, there can be no assurance that HMRC will not challenge the Intended U.K. CGT Treatment on other grounds or that a court will not sustain such a challenge. If HMRC were to be successful in any such contention, or if for any other reason the Intended U.K. CGT Treatment were to not be respected for U.K. tax purposes, the Merger could be a taxable event to Ferguson Shareholders for U.K. CGT purposes. Ferguson Shareholders are urged to consult with their own tax advisors with respect to the tax consequences of the Merger.

Non-U.S. Holders and Non-U.K. Holders may recognize taxable gain as a result of the Merger.

Ferguson has not analyzed the impact of the Merger in all jurisdictions and it is possible that the Merger would be viewed as taxable to shareholders in jurisdictions other than the U.S. and U.K. Ferguson Shareholders are urged to consult with their own tax advisors with respect to their specific tax consequences of the Merger.

 

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Risks Related to Our Business

Market conditions, competition, financial

Weakness in the economy, market trends, uncertainty and other conditions in the markets in which we operate, particularly in the U.S., may adversely affect the profitability and financial stability of our customers, and could negatively impact our sales growth and results of operations.

Our financial performance depends significantly on industry trends and general economic conditions, including the state of the residential and non-residential markets, as well as changes in gross domestic product in the geographic markets in which we operate, particularly in the U.S. where we generated 95% of our net sales from continuing operations in fiscal 2023. We serve several end markets in which the demand for our products is sensitive to the construction activity, capital spending and demand for products of our customers. Many of these customers operate in markets that are subject to cyclical fluctuations resulting from market uncertainty, costs of goods sold, rising interest rates, currency exchange rates, labor shortages including a shortage of skilled trade professionals, work stoppages and strikes, foreign competition, offshoring of production, oil and natural gas prices, geopolitical developments, wage inflation and a variety of other factors beyond our control. In addition, geopolitical conflicts and any related international responses may exacerbate inflationary pressures, including causing increases in commodity prices and energy costs. Any of these factors could cause customers to idle or close facilities, delay purchases, reduce production levels or experience reductions in the demand for their own products or services.

Adverse conditions in, or uncertainty about, the markets in which we operate, the economy or the political climate could also adversely impact our customers and their confidence or financial condition, causing them to decide not to purchase our products or alter the timing of purchasing decisions or construction projects, and could also impact their ability to pay for products purchased from us. Other factors beyond our control, including but not limited to unemployment, interest rate and mortgage rate fluctuation, mortgage delinquency and foreclosure rates, inventory loss due to theft, foreign currency fluctuations, labor and healthcare costs, the availability of financing, disruption in the financial and credit markets, including as a result of instability in the banking sector and the failure of financial institutions, changes in tax laws affecting the real estate industry, product availability constraints as a result of ineffectiveness of or disruption to our domestic or international supply chain or the fulfillment network, weather, cybersecurity incidents or network security breaches, natural disasters, acts of terrorism, acts of war, consumer activism, global pandemics, international trade tensions, civil unrest and geopolitical uncertainties, could have a material adverse effect on our business, financial condition and results of operations.

Any of these events could impair the ability of our customers to make full and timely payments for, or reduce the volume of, products these customers purchase from us and could cause increased pressure on our selling prices and terms of sale. Accordingly, a significant or prolonged slowdown in activity in our relevant end markets could negatively impact net sales growth and results of operations. In addition, we have closed and may in the future have to close underperforming branches and/or showrooms from time to time as warranted by general economic conditions and/or weakness in the end markets in which we operate. Such closures could have a material adverse effect on our business, financial condition and results of operations.

We could be adversely impacted by declines in the residential and non-residential markets, as well as the RMI and new construction markets.

Our end markets focusing on the residential and non-residential markets as well as the RMI and new construction markets are dependent, in part, upon certain macroeconomic trends in these markets. In fiscal 2023, our net sales in the residential and non-residential markets generated approximately 52% and 48%, respectively, of net sales from continuing operations. Our sales within the residential and non-residential markets are divided further into RMI and new construction markets, which represent approximately 60% and 40%, respectively, of net sales from continuing operations.

A slowdown in the residential and/or non-residential markets caused by inflation, higher interest or mortgage rates or other issues in the market, may cause unanticipated shifts in our end market preferences and purchasing practices and in the business models and strategies of our customers. Such shifts may alter the nature and prices of products demanded by the end consumer and, in turn, our customers and could adversely affect our business, financial condition and results of operations.

The industries in which we operate are highly competitive, and changes in competition, including as a result of consolidation, could result in decreased demand for our products and related service offerings and could have a material effect on our sales and profitability.

We face competition in all markets we serve from wholesale distributors, supply houses, retail enterprises, online businesses that compete with price transparency, and from manufacturers (including some of our own suppliers) that sell directly to certain

 

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segments of the market. In particular, wholesale and distribution businesses in other industry sectors have been disrupted by the arrival of new competitors with lower-cost non-value added transactional business models or new technologies to aggregate demand away from incumbents. In the event that one or more online marketplace companies, which in some cases have larger customer bases, greater brand recognition and greater resources than we do, focus resources on competing in our markets, it could have a material adverse effect on our business, financial condition and results of operations. In addition, such competitors may use aggressive pricing and marketing tactics (such as paid search marketing), devote substantially more financial resources to website and systems development, or respond more quickly to emerging technologies (such as generative AI) and changes in customer preferences than we do. It is expected that competition could further intensify in the future as online commerce continues to grow worldwide. Increased competition may result in reduced net sales, lower operating margins, reduced profitability, loss of market share and diminished brand recognition.

The industries in which we operate may be disrupted by non-traditional competitors through acquisitions of traditional competitors to expand their capabilities. The industries in which we operate are also consolidating as customers are increasingly aware of the total costs of fulfillment and of the need to have consistent sources of supply at multiple locations. This competitor consolidation could cause the industries to become more competitive as greater economies of scale are achieved.

Additionally, we have experienced competitive pressure from certain of our suppliers who are now selling their products directly to customers. Suppliers can often sell their products at lower prices and maintain higher gross margins on their product sales than we can. Continued competition from our suppliers may negatively impact our business and results of operations, including through reduced sales, lower operating margins, reduced profitability, loss of market share and diminished brand recognition.

In response to these competitive pressures, among other initiatives, we are applying technology as an important medium for delivering better customer service alongside the supply of our products, and to create dedicated tools to save customers time and money. However, we may not continue to realize benefits from such investments and such initiatives may not be successful. In addition, failure to effectively execute our strategies, including the development and acquisition of such new business models or technologies, or successfully identify future market and competitive pressures, could have a material adverse effect on net sales and profitability.

Fluctuating product prices may adversely affect our business, financial condition and results of operations.

Some of our products contain significant amounts of commodity-priced materials, predominantly plastic, copper and steel, and other components that are subject to price changes based upon fluctuations in the commodities market, which can arise from changes in domestic and international supply and demand, general inflationary pressures, labor costs, competition, tariff and trade restrictions and geopolitical conflict, among other factors. To a lesser extent, fluctuations in the price of fuel could affect transportation costs. In addition, shipping capacity constraints and related fluctuations in shipping rates and space availability further impact the product cost. Our ability to adjust prices in a timely manner to account for price fluctuations will often depend on market conditions, our fixed costs, inflation and deflation, and other factors. In the event that circumstances require us to adjust our product prices and operational strategies to reflect fluctuating prices (inflation/deflation), there can be no assurance that such adjustments will be effective. For example, our inability to pass on all or a portion of product price inflation to our customers in a timely manner could reduce our profit margins. Similarly, downward pressure on product prices due to deflation could cause profit margins to decline. Moreover, our efforts to monitor for signs of moderation or deflation, which would present risks that we may not be able to totally mitigate, may be ineffective. Any failure to appropriately address some or all of these risks could have a material adverse effect on our business, financial condition and results of operations.

We have funding risks related to our defined benefit pension plans.

We operate a variety of pension plans, including funded and underfunded defined benefit schemes in Canada and the U.K. Our pension trustees and plan sponsors aim to match the liabilities with a portfolio of assets, comprising equity and debt securities alongside diversified growth assets and further investments designed to hedge the underlying interest and inflation risk inherent in the associated liabilities. The market value of these assets can rise and fall over time, which impacts the funding position of the plan. The U.K. defined benefit pension plan (the “U.K. Plan”), our largest defined benefit plan, is closed to future service costs and has a buy-in insurance policy which covers a large proportion of the existing participants. Following the completion of our disposal of Wolseley UK Limited on January 29, 2021, we retained future responsibility for the U.K. Plan, as the ongoing liabilities were not transferred to the purchaser.

As required by U.K. pensions regulation, the U.K. Plan completed its triennial actuarial valuation exercise, which is measured on a technical provisions basis, based on the U.K. Plan’s financial position as of April 30, 2022. The triennial valuation

 

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resulted in a need for deficit reduction contributions of £133 million spread over the period to January 31, 2026, of which we have paid £38 million as of January 31, 2024. New funding requirements will apply to the next triennial valuation of the U.K. Plan (as of April 30, 2025), requiring the plan to target a funding level where dependency on the employer is low. Although we broadly comply with the funding target principles under these new funding requirements as of our April 30, 2022 valuation, the U.K. pensions regulator’s code for the new requirements has yet to be finalized. If the code changes from current expectations, it could lead to employer deficit reduction contributions changing. In addition to required contributions, we make voluntary contributions at the discretion of management. The potential requirement to pay such additional sums, due to factors such as a deterioration in economic conditions or changes in actuarial assumptions, could have an adverse effect on our financial condition.

Furthermore, the U.K. pensions regulator could take action (for example civil, criminal, monetary and non-monetary penalties) in situations where the “employer covenant” of a defined benefit plan—the willingness and ability of the sponsor to fund the plan—has been detrimentally affected in a material way or where corporate activity, such as certain corporate activities we will undertake in connection with the Merger, poses a materially detrimental risk to accrued plan benefits. The consequences of successful civil and criminal actions include fines, and (in the case of civil actions) requirements to provide further funding for the plan, for both the sponsor and its connected group companies. In addition, actions by the trustees of our pension plans or any material revisions to the existing pension legislation could result in us being required to incur significant additional costs immediately or in short time frames. Such costs, in turn, could have an adverse effect on our financial condition.

Changes in our credit ratings and outlook may reduce access to capital and increase borrowing costs.

Our credit ratings are based on a number of factors, including our financial strength and factors outside of our control, such as conditions affecting our industry generally and the introduction of new rating practices and methodologies. A resurgence of the COVID-19 pandemic or other public health crisis could negatively impact our credit ratings and thereby adversely affect our access to capital and cost of capital. Although we currently do not expect any changes to our credit rating in connection with the Merger, we cannot provide assurances that our current credit ratings will remain in effect or that the ratings will not be lowered, suspended or withdrawn entirely by the rating agencies either as a result of the Merger or otherwise. If rating agencies lower, suspend or withdraw the ratings, the market price or marketability of our securities may be adversely affected. Pressure on the ratings could also arise from higher shareholder payouts or larger acquisitions than we have currently planned that result in increased leverage, or in a deterioration in the metrics used by the rating agencies to assess creditworthiness. In addition, any change in ratings could make it more difficult for us to raise capital on acceptable terms, impact the ability to obtain adequate financing and result in higher interest costs on future financings.

We may not be able to access the capital and credit markets on terms that are favorable to us.

We may seek access to the capital and credit markets to supplement our existing funds and cash generated from operations for working capital, capital expenditure and debt service requirements and other business initiatives. Capital and credit markets may experience volatility and disruption from time to time, which can lead to uncertainty and liquidity issues for both borrowers and investors. In the event of adverse market conditions, we may be unable to obtain capital or credit market financing on favorable terms, which could materially adversely affect our business, financial condition and results of operations.

Potential regional or global barriers to trade or a global trade war could increase the cost of our products, which could adversely impact the competitiveness of our products and our financial results.

Trade tensions between the U.S. and China have escalated over the past several years which resulted in elevated tariffs. The current U.S. presidential administration has not taken action to roll these back. However, in May 2022, the Office of United States Trade Representative (the “USTR”) commenced its quadrennial review of the tariffs imposed on China-origin goods pursuant to Section 301 of the Trade Act of 1974 (the “U.S. Trade Act”). The USTR initiated its review pursuant to Section 307(c) of the U.S. Trade Act, which requires the USTR to review the “necessity of” Section 301 actions four years after their implementation. In September 2022, the USTR announced that because requests for continuation were received, the tariff actions had not terminated and the USTR would conduct a review of the tariff actions. In October 2022, the USTR announced the public comment phase of its four-year, statutorily mandated review of the Section 301 tariffs.

This process may or may not change these tariff actions and it remains unclear what additional, new, or different actions, if any, will be taken by the U.S., China, or other governments with respect to international trade agreements, the imposition of tariffs on goods imported into the U.S., the erection of barriers to trade, tax policy related to international commerce, or other trade matters. The potential removal of some of the tariffs and trade actions and the respective deflationary impact could have an effect on our business, financial condition and results of operations. At this point in time, it remains to be seen what effects, if any, the current administration will have on a long-term comprehensive agreement on tariffs between the U.S. and China.

 

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Our strategy could be materially adversely affected by our indebtedness.

We had total debt of $3.7 billion as of October 31, 2023. We may incur substantial additional indebtedness in the future, in particular in connection with future acquisitions which remain a core part of our strategy, some of which may be secured by some or all of our assets. Our overall level of indebtedness from time to time may have an adverse effect on our strategy, including requiring us to dedicate portions of our cash flow to payments on our debt, thereby reducing funds available for reinvestment in the business; restricting us from securing the financing, if necessary, to pursue acquisition opportunities; limiting our flexibility in planning for, or reacting to, changes in our business and industry; limiting our ability to purchase, redeem or retire New TopCo Common Stock following the Merger; and placing us at a competitive disadvantage compared to our competitors that have lower levels of indebtedness. In addition, our indebtedness exposes us to the risk of increased interest rates because a portion of our borrowings are at variable rates of interest.

We may need to refinance some or all of our debt upon maturity either on terms which could potentially be less favorable than the existing terms or under unfavorable market conditions, which may also have an adverse effect on our strategy. Our ability to generate the amount of cash needed to pay interest and principal on our indebtedness and/or our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors beyond our control.

Fluctuations in foreign currency may have an adverse effect on reported results of operations.

We are exposed to foreign currency exchange rate risk with respect to the USD relative to the local currencies of our international subsidiaries, predominantly CAD and GBP, arising from transactions in the normal course of business (such as sales and loans to wholly owned subsidiaries, sales to third-party customers, and purchases from suppliers). Our only significant foreign currency exchange exposure from a net sales perspective is CAD. We also have foreign currency exposure to the extent that receipts and expenditures are not denominated in the subsidiary’s functional currency, which could impact net sales, costs and cash flows. Fluctuations in foreign currency exchange rates could affect our results of operations and impact reported net sales and net income.

Our ability to pay dividends or effect other returns of capital in the future depends, among other things, on our financial performance.

There can be no guarantee that our historical performance will be repeated in the future, particularly given the competitive nature of the industry in which we operate, and our net sales, net income and cash flow may significantly underperform market expectations. If our cash flow underperforms market expectations, then our capacity to pay a dividend or effect other returns of capital (including, without limitation, share repurchases) may be negatively impacted. Any decision to declare and pay dividends or to effect other returns of capital will be made at the discretion of the New TopCo Board following the Merger and will depend on, among other things, Delaware corporate law, restrictions (if any) on the payment of dividends and/or capital returns in our financing arrangements, our financial position, retained earnings/net income, working capital requirements, interest expense, general economic conditions, effects from the outbreak or resurgence of a global health crisis, and other factors that the New TopCo Board deems significant from time to time.

We cannot guarantee that our share repurchase program will be fully consummated or that our share repurchase program will enhance long-term shareholder value, and share repurchases could increase the volatility of the price of New TopCo Common Stock and could diminish our liquidity.

As of October 31, 2023, Ferguson had completed $2.6 billion of its previously announced $3.0 billion share repurchase program with approximately $0.4 billion remaining under its share repurchase program. New TopCo is expected to continue Ferguson’s repurchase program following the Merger. However, the timing and actual number of New TopCo Common Stock to be repurchased following the Merger will depend on a variety of factors including cash availability and other market conditions. The share repurchase program could affect the price of New TopCo Common Stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of New TopCo Common Stock. The existence of a share repurchase program could also cause the price of New TopCo Common Stock to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for New TopCo Common Stock. Additionally, repurchases under our share repurchase program could diminish our liquidity.

New TopCo will be a holding company with no business operations of its own and will depend on its subsidiaries for cash, including in order to pay dividends.

New TopCo, like Ferguson, will be a holding company with no independent operations and will be dependent on earnings and distributions of funds from its operating subsidiaries for cash, including in order to pay dividends to its shareholders. New

 

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TopCo’s ability to pay dividends to its shareholders will therefore depend on the ability of its subsidiaries to distribute profits or pay dividends to New TopCo, general economic conditions and other factors that the New TopCo Board may deem significant from time to time. New TopCo’s distributable reserves can be affected by reductions in profitability, impairment of assets and severe market turbulence.

Operations and technology

If our domestic or international supply chain or our fulfillment network for our products is ineffective or disrupted for any reason, or if these operations are subject to trade policy changes, our business, financial condition and results of operations could be adversely affected.

We source, distribute and sell products from domestic and international suppliers, and their ability to reliably and efficiently fulfill our orders is critical to our business success. As of July 31, 2023, we had approximately 36,000 suppliers located in various countries around the world.

Financial instability among key suppliers, political unrest, labor unrest, disputes or war in source countries (including resulting from potential conflict between China and Taiwan) or elsewhere in our supply chain (including shipping disruptions in the Red Sea), changes in the total costs in our supply chain (including, but not limited, to changes in fuel and labor costs and currency exchange rates), port or rail labor disputes and security, the outbreak or resurgence of pandemics, weather- or climate-related events, natural disasters, work stoppages or strikes, shipping capacity constraints or embargoes, changes in trade policy, trade restrictions imposed by the U.S., Europe, China or another major source country, tariffs or duties, fluctuations in currency exchange rates and transport availability, capacity and costs are all beyond our control and could negatively impact our business if they seriously disrupted the movement of products through our supply chain or increased their costs. Additionally, as we add fulfillment capabilities or pursue strategies with different fulfillment requirements, our fulfillment network becomes increasingly complex and operating it becomes more challenging. If our fulfillment network does not operate properly or if a supplier fails to deliver on its commitments, we could experience delays in inventory availability at our distribution facilities and branches, increased delivery costs or lack of availability, any of which could lead to lower net sales and decreased customer confidence, and adversely affect our results of operations. Furthermore, more of our existing suppliers may decide to supply products directly to end users that are our existing or potential customers, which could have a detrimental effect on our ability to keep and procure customers, and maintain and win business, thereby having a material adverse effect on our business, financial condition and results of operations.

Execution of our operational strategies could prove unsuccessful, which could have a material adverse effect on our business, financial condition and results of operations.

To achieve our key priorities, we must drive profitable growth across our operational businesses by fulfilling customer needs, capitalizing on attractive markets and growth opportunities and achieving planned execution. Meeting customer needs through comprehensive and differentiated products and solutions that support our customers’ projects is a key part of our strategy to drive profitable growth. If service levels were to significantly decrease, customers might purchase from our competitors instead, resulting in reduced net sales, lower operating margins, reduced profitability, loss of market share and/or diminished brand recognition.

Development of our operating model is a key part of driving profitable growth. If we are not sufficiently agile in adapting our operating model, we may be unable to adapt to changing customer wants and/or to flex our cost base when required. Moreover, we may not successfully execute our strategic initiatives on expected timelines or at all, including through failure to have the right talent in place or to achieve internal alignment or coordination. Any failure to appropriately address some or all of these risks could damage our reputation and have a material adverse effect on our business, financial condition and results of operations.

We may not rapidly identify or effectively respond to direct and/or end customers’ wants, expectations or trends, which could adversely affect our relationship with customers, our reputation, the demand for our products and our market share.

The success of our business depends in part on our ability to identify and respond promptly to evolving trends in demographics, as well as customer wants, preferences and expectations, while also managing appropriate inventory levels and maintaining our focus on delivering an excellent customer experience. For example, our customers are currently facing challenges in the form of a shortage of skilled trade professionals and a need for improved construction productivity. It is also difficult to successfully predict the products and solutions that customers will require. In addition, the customers in the markets we serve have different needs and expectations, many of which evolve as the demographics in a particular market change.

 

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Inventory levels in excess of customer demand due to the difficulty of calibrating demand for such products, the concentration of demand for a limited number of products, difficulties in product sourcing, or rapid changes in demand may result in inventory write-downs, and the sale of excess inventory at discounted prices could have an adverse effect on our operating results, financial condition and cash flows. Conversely, if we underestimate customer demand for our products or if our manufacturers fail to supply products we require at the time we need them, we may experience inventory shortages. Inventory shortages might delay shipments to customers and negatively impact customer relationships.

We offer more localized assortments of our products to appeal to needs within each end market. If we do not successfully evolve and differentiate to meet the individual needs and expectations of, or within, a particular end market, we may lose market share.

We are continuing to invest in our e-commerce and omni-channel capabilities and other technology solutions, including investments in significant upgrades to our enterprise-wide resource planning systems, to simplify our customer propositions and to optimize the supply chain and branch network to be more efficient and to deliver a more efficient business for our customers.

The cost and potential problems and interruptions associated with these initiatives could disrupt or reduce the efficiency of our online and in-store operations in the near term, lead to product availability issues and negatively affect our relationship with our customers. Furthermore, accomplishing these initiatives will require a substantial investment in additional information technology associates and other specialized associates. We may face significant competition in the market for these resources and may not be successful in our hiring efforts. Failure to choose the right investments and implement them in the right manner and at the right pace could adversely affect our relationship with customers, our reputation, the demand for our products and solutions, and our market share. In addition, our branch and omni-channel initiatives, enhanced supply chain, and new or upgraded information technology systems might not provide the anticipated benefits. For example, in fiscal 2023, we determined that one of the solutions developed to target certain branch transactional processes did not meet our customer service, speed and efficiency goals and, as a result, chose not to proceed with that component and recorded a non-cash impairment charge of $107 million of previously capitalized software costs in the U.S. It might take longer than expected to realize the anticipated benefits, cost more than budgeted, or all or part of the initiatives might fail altogether, each of which could adversely impact our competitive position and our business, financial condition, results of operations or cash flows.

Acquisitions, partnerships, joint ventures, dispositions and other business combinations or strategic transactions involve a number of inherent risks, any of which could result in the benefits anticipated not being realized and could have an adverse effect on our business, financial condition and results of operations.

Acquisitions are an important part of our growth model and we regularly consider and enter into strategic transactions, including mergers, acquisitions, investments and other growth, market and geographic expansion strategies, with the expectation that these transactions will result in increases in sales, cost savings, synergies and various other benefits.

During fiscal 2023, 2022, and 2021, we completed a total of 8, 17, and 7 acquisitions, respectively. We may not realize any anticipated benefits from such transactions or partnerships, or any future ones, and we may be exposed to additional liabilities and risks from any acquired business or joint venture (including but not limited to risks associated with cybersecurity incidents, unknown claims and disputes by third parties against the companies we acquire, and business disruption related to inability to retain associates of the acquired entity). In addition, we may be exposed to litigation in connection with our acquisition and partnership transactions. Our due diligence investigations may fail to identify all of the problems, liabilities or other challenges associated with an acquired business which could result in an increased risk of unanticipated or unknown issues or liabilities, including with respect to environmental, competition and other regulatory matters, and our mitigation strategies for such risks that are identified may not be effective.

Furthermore, we may have trouble identifying suitable acquisition targets in the future. Our ability to deliver the expected benefits from any strategic transactions that we do complete is subject to numerous uncertainties and risks, including our acquisition assumptions; our ability to integrate personnel, labor models, financial, customer relationships, supply chain and logistics, IT and other systems successfully; disruption of our ongoing business and distraction of management; hiring additional management and other critical personnel; product quality compliance of new suppliers; and increasing the scope, geographic diversity and complexity of our operations.

Effective internal controls are necessary to provide reliable and accurate financial reports, and the integration of businesses may create complexity in our financial systems and internal controls and make them more difficult to manage. Integration of businesses into our internal control system could cause us to fail to meet our financial reporting obligations. Moreover, any failure to integrate, or delay in integrating, IT systems of acquired businesses could create an increased risk of cybersecurity incidents. Additionally, any impairment of goodwill or other assets acquired in a strategic transaction or charges to earnings associated with any strategic transaction, may materially reduce our profitability. Following integration, an acquired business

 

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may not produce the expected margins or cash flows. Our shareholders, vendors or customers may react unfavorably to substantial strategic transactions. Furthermore, we may finance these strategic transactions by incurring additional debt or issuing equity, which could increase leverage or impact our ability to access capital in the future.

If we fail to qualify for supplier rebates or are unable to maintain or adequately renegotiate our rebate arrangements, our results of operations could be materially adversely affected.

Many of our products are purchased pursuant to rebate arrangements that entitle us to receive a rebate based on specified purchases. Some arrangements require us to purchase minimum quantities and result in higher rebates with increased quantities of purchases. These rebates effectively reduce the costs of our products, and we manage our business to take advantage of these programs. Rebate arrangements are subject to renegotiation with our suppliers from time to time. In addition, consolidation of suppliers may result in the reduction or elimination of rebate programs in which we participate. If we fail to qualify for these rebates or are unable to renew rebate programs on desirable terms, or a supplier materially reduces or stops offering rebates, our costs could materially increase, and our gross margins and net income could be materially adversely affected.

If we are unable to protect our sensitive data and information systems against data corruption, cybersecurity incidents or network security breaches, or if we are unable to provide adequate security in the electronic transmission of sensitive data, it could adversely affect the operations of our business.

We may face global cybersecurity threats, which may range from uncoordinated individual attempts to sophisticated and targeted measures, known as advanced persistent threats, directed at us and our customers, suppliers, and service providers. Cybersecurity incidents and network security breaches may include, but are not limited to, attempts to access or unauthorized access of information, exploitation of vulnerabilities (including those of third-party software or systems), computer viruses, ransomware, denial of service and other electronic security breaches. Cyber-attacks from computer hackers and cyber criminals and other malicious internet-based activity continue to increase generally, and our services and systems, including the systems of our outsourced service providers, have been and may in the future continue to be the target of various forms of cybersecurity incidents such as Domain Name System (“DNS”) attacks, wireless network attacks, viruses and worms, malicious software, ransomware, application centric attacks, peer-to-peer attacks, business email compromises and phishing attempts, backdoor trojans and distributed denial of service attacks. Furthermore, given that new technologies continue to emerge, the methods used by computer hackers and cyber criminals to obtain unauthorized access to data or to sabotage computer systems change frequently and continue to grow in sophistication. Accordingly, we may be unable to anticipate or detect such attacks or promptly and effectively respond to them.

While we have instituted safeguards for the protection of our information systems and believe we use reputable third-party service providers, during the normal course of business, we and our service providers have experienced and expect to continue to experience cyber-attacks on our information systems, and we and our service providers may be unable to protect sensitive data and/or the integrity of our information systems. A cybersecurity incident could be caused by malicious third parties using sophisticated methods to circumvent firewalls, encryption and other security defenses. Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target. Accordingly, we may be unable to anticipate these techniques or implement adequate preventative measures.

As a result, we or our service providers could experience errors, interruptions, delays, or cessations of service in key portions of our information technology infrastructure, which could significantly disrupt our operations and be costly, time-consuming and resource-intensive to remedy. As a result, we could forego net sales or profit margins if we are unable to operate. Furthermore, if critical information systems fail or otherwise become unavailable, our ability to process orders, maintain proper levels of inventories, collect accounts receivable and disburse funds could be adversely affected. Any such interruption of our information systems could also subject us to additional costs. Loss of customer, supplier, associate, or other business information could disrupt operations, damage our reputation, and expose us to claims from customers, suppliers, financial institutions, regulators, payment card associations, associates, and others, any of which could have a material adverse effect on our business, financial condition and results of operations.

We are required to maintain the privacy and security of personal information in compliance with privacy and data protection regulations worldwide. Failure to meet the requirements could harm our business and damage our reputation with customers, suppliers, and associates.

We rely on IT systems, networks, products, and services, some of which are managed by service providers to protect our information. Increased information security threats and more sophisticated threat actors pose a risk to our information security program. Additionally, we collect, store, and process personal information relating to our customers, suppliers, and associates. This information is increasingly subject to a variety of U.S. and international laws and regulations that are constantly changing

 

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and becoming more complex, such as the General Data Protection Regulation, as enacted in the European Union and the U.K., Canada’s Personal Information Protection and Electronic Documents Act, and the California Consumer Privacy Act (the “CCPA”). These laws and regulations may carry significant potential penalties for non-compliance. For example, in the U.S. the CCPA, which came into effect in January 2020, has given California consumers more control over the personal information that businesses collect about them. The law created new data privacy rights for California consumers and requires certain businesses who collect personal information from California consumers to comply with various data protection requirements. Further, on November 3, 2020, the California Privacy Rights Act (the “CPRA”) was voted into law by California residents. The CPRA significantly amends the CCPA and imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data. It also creates a new California data protection agency specifically tasked to enforce the law, which could result in increased regulatory scrutiny of businesses conducting activities in California in the areas of data protection and security. The substantive requirements for businesses subject to the CPRA became effective on January 1, 2023, and enforceable on July 1, 2023. Businesses like ours that are subject to the CCPA who fail to comply with the CCPA may be subject to fines and penalties per incident of non-compliance and class action lawsuits in the event of a data breach of sensitive personal information. Other U.S. states continue to enact or are proposing or have enacted similar laws related to the protection of consumer personal information.

Data privacy and data protection laws and regulations are typically intended to protect the privacy of personal information that is collected, processed, transmitted, and stored in or from the governing jurisdiction. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between a company and its subsidiaries, including associate information. While we have invested and continue to invest significant resources to comply with data privacy regulations, many of these regulations are new, complex, and subject to interpretation. To maintain compliance with these laws, we may incur increased costs to continually evaluate and modify our policies and processes and to adapt to new legal and regulatory requirements. Non-compliance with these laws could result in negative publicity, damage to our reputation, penalties, or significant legal liability. Our business and operations could also be adversely affected if legislation or regulations are expanded to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business.

A failure of a key information technology system or process could adversely affect the operations of our business.

Technology systems and data are fundamental to the operations, future growth and success of our business. In managing our business, we rely on the integrity and security of, and consistent access to, data from these systems such as sales, customer data, merchandise ordering, inventory replenishment and order fulfillment. A major disruption of the information technology systems and their backup mechanisms may cause us to incur significant costs to repair the systems, experience a critical loss of data and/or result in business interruptions.

For these information technology systems and processes to operate effectively, we or our service providers must periodically maintain and update them. Furthermore, we must retain and recruit information technology associates and other specialized associates that can operate, maintain and update these systems. In addition, our systems and the third-party systems on which we rely are subject to damage or interruption from a number of causes, including: power outages; computer and telecommunications failures; cybersecurity incidents, including the use of ransomware; catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, or other natural disasters; a global pandemic outbreak or resurgence; acts of war or terrorism; and design or usage errors by our associates, contractors or service providers. We and our service providers seek to maintain our respective systems effectively and to successfully address the risk of compromise of the integrity, security and consistent operations of these systems, utilizing all reasonable and appropriate means available. However, such efforts may not be successful.

We rely on data centers and other technologies and services provided by third parties in order to manage our cloud-based infrastructure and operate our business. If any of these services becomes unavailable or otherwise is unable to serve our requirements due to extended outages, interruptions, facility closure, or because it is no longer available on commercially reasonable terms, expenses could increase and our operations could be disrupted or otherwise impacted until appropriate substitute services, if available, are identified, obtained, and implemented, which could have a material adverse effect on our business, financial condition and results of operations.

We are subject to payment-related risks that could increase our selling, general and administrative expenses, expose us to fraud or theft, subject us to potential liability, and potentially disrupt our business.

We accept payments using a variety of methods, including cash, checks, credit and debit cards, PayPal and electronic payment, and we may offer new payment options over time. Acceptance of these payment options subjects us to rules, regulations, contractual obligations and compliance requirements, including payment network rules and operating guidelines, data security standards and certification requirements, and rules governing electronic funds transfers. These requirements may change

 

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over time or be reinterpreted, making compliance more difficult or costly. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our selling, general and administrative expenses. We rely on third parties to provide payment processing services, including the processing of credit cards, debit cards, and other forms of electronic payment. If these companies become unable to provide these services to us, or if their systems are compromised, it could potentially disrupt our business.

The payment methods that we offer also subject us to potential fraud and theft by criminals, who are becoming increasingly more sophisticated, seeking to obtain unauthorized access to or exploit weaknesses that may exist in the payment systems. If we fail to comply with applicable rules or requirements for the payment methods we accept, or if payment-related data is compromised due to a breach or misuse of data, we may be liable for costs incurred by payment card issuing banks and other third parties or be subject to fines and higher transaction fees, or our ability to accept or facilitate certain types of payments may be impaired. In addition, our customers could lose confidence in certain payment types, which may result in a shift to other payment types, potential changes to our payment systems that may result in higher costs, or loss of business. As a result, our business, financial condition and results of operations could be adversely affected.

Also, certain of our customers, suppliers or other third parties may seek to obtain products fraudulently from, or submit fraudulent invoices to, us. We have sought to put in place a number of processes and controls to minimize opportunities for fraud. However, if we are unsuccessful in detecting fraudulent activities, it could suffer loss directly and/or lose the confidence of its customers and/or suppliers, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, our operations are working capital intensive, and our inventories, accounts receivable and accounts payable are significant components of our net asset base. We manage our inventories and accounts payable through our purchasing policies and our accounts receivable through our customer credit policies. We perform periodic credit evaluations of our customers’ financial condition, and collateral is generally not required. We evaluate the collectability of accounts receivable based on numerous factors, including past transaction history with customers and their creditworthiness based on reports we receive from independent external credit bureaus, and we provide a reserve for accounts that we believe to be uncollectible. A significant deterioration in the economy, including as a result of any public health crisis or any geopolitical conflict could have an adverse effect on collecting our accounts receivable, including longer payment cycles, increased collection costs and defaults. In addition, if customers fail to pay within terms of our customer credit policies, we may enforce lien and bond rights, which could lead to customer dissatisfaction and loss. If we fail to adequately manage our product purchasing or customer credit policies, our working capital and financial condition may be adversely affected.

A public health crisis could have a material adverse impact on our business and results of operations.

A public health crisis, and associated government restrictions to prevent its spread, could have a material adverse impact on our business, results of operations and financial condition as well as the operations of some of our suppliers. For example, the COVID-19 pandemic resulted in supply chain disruptions and caused significant disruption in the U.S. and Canadian economies, including due to the restrictive measures adopted to prevent its spread and general market unpredictability.

A widespread public health crisis may decrease demand for our products and solutions due to public reaction to the health crisis or actions taken by governmental or other regulatory organizations to control or otherwise limit the effects of the public health crisis. This crisis may also limit labor availability that could adversely impact manufacturing and distribution throughout the supply chain and limit the availability of product from our suppliers. Depending on the ultimate scope and duration of the supply chain disruptions, we may experience increases in product costs which we may not be able to pass on to our customers, loss of sales due to lack of product availability or potential customer claims from the inability to provide products in accordance with contractual terms. In addition, if significant numbers of associates, key personnel and/or senior management become unavailable due to sickness, legal requirements or self-isolation, our operations could be disrupted and materially adversely affected. Measures taken in response to a public health crisis could adversely impact our ability to retain and attract associates, including key personnel. While we are unable to predict the likelihood, timing, magnitude and duration of a public health crisis and the associated effects to our business, a public health crisis and any associated supply chain disruption, labor market impact, recession, or depression could have a material adverse effect on our business, financial condition and results of operations and may also have the effect of heightening many of the other risks described in this “Risk Factors” section.

People, products and facilities

In order to compete, we must attract, retain and motivate key associates, and the failure to do so could have an adverse effect on our business, financial condition and results of operations.

We depend on our executive officers and senior management to run our business. As we continue to manage change and develop new business models and new ways of working, we will need to develop suitable skill sets within our organization.

 

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Furthermore, as we continue to execute our operational strategies it is important that existing skill sets, talent and culture are retained. Failure to do so could delay the execution of our operational strategies, result in loss of institutional knowledge and reduce our supply of future management skill. In addition, our future success depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees, including those that work remotely. The current market for such positions is highly competitive. Qualified individuals are in high demand and we may incur significant costs to attract and retain them. Moreover, the loss of any of our senior management or other key employees or our inability to recruit and develop mid-level managers could materially and adversely affect our ability to execute our business plan and we may be unable to find adequate replacements.

We customarily negotiate employment agreements and non-competition agreements with key personnel of the companies we acquire in order to maintain key customer relationships and manage the transition of the acquired business. The loss of senior management and other key personnel, or the inability to hire and retain qualified replacements, both generally and in connection with the execution of key business strategies could adversely affect our business, financial condition and results of operations.

Furthermore, our ability to provide high-quality products, advice and services on a timely basis depends, to a significant extent, on having an adequate number of qualified associates, including those in managerial, technical, sales, marketing and support positions. Accordingly, our ability to increase productivity and profitability and support our growth strategies may be limited by our ability to employ, train, motivate and retain skilled personnel, which in turn may be hindered by any present or future restructurings and cost savings initiatives. Due to the current tight labor market, we face significant competition in attracting and retaining skilled personnel, such as personnel with specialized skills and hourly workers, and our recruiting cycle may be longer as a result. While our retention rates have not changed materially, we have experienced, and may continue to experience, extended lead times in backfilling our more transient roles. If the tight labor market persists, this may increase our costs to maintain our workforce.

Our workforce constitutes a significant proportion of our cost base. Current wage inflation, as well as potential changes in applicable laws and regulations or other factors, such as labor union activity, resulting in increased labor costs, could have a material adverse effect on our business, financial condition and results of operations.

Failure to achieve and maintain a high level of product and service quality could damage our reputation and negatively impact our business, financial condition and results of operations.

To continue to be successful, we must continue to preserve, grow and leverage the value of our brand in the marketplace. Reputational value is based in large part on perceptions of subjective qualities. Even an isolated incident, such as a high-profile product recall, or the aggregate effect of individually insignificant incidents, can erode trust and confidence, particularly if such incident or incidents result in adverse publicity, governmental investigations or litigation, and, as a result, could tarnish our brand and lead to adverse effects on our business.

In particular, product quality and service issues, including as a result of our suppliers’ or manufacturers’ acts or omissions, could negatively impact customer confidence in our brands and our products. As we do not have direct control over the quality of the products manufactured or supplied by third-party suppliers, we are exposed to risks relating to the quality of the products we distribute. If our product or service offerings do not meet applicable safety standards or customers’ expectations regarding safety or quality or are alleged to have quality issues or to have caused personal injury or other damage, or our supplier does not meet our expectations on responsible sourcing outlined in our supplier code of conduct, we could experience lower net sales and increased costs and be exposed to legal, financial and reputational risks, as well as governmental enforcement actions. In addition, actual, potential or perceived product safety concerns could result in costly product recalls.

We seek to enter into contracts with suppliers which provide for indemnification from any costs associated with the provision of defective products. However, there can be no assurance that such contractual rights will be obtained or adequate, or that related indemnification claims will be successfully asserted by us.

The nature of our operations may expose our associates, contractors, customers, suppliers and other individuals to health and safety risks and we may incur property, casualty or other losses not covered by our insurance policies and damage to our reputation.

The nature of our operations can expose our associates, contractors, customers, suppliers and other individuals to risks, including the motoring public to health and safety risks (including potential exposure to public health crises, infectious diseases and viruses), which can lead to loss of life or severe injuries or illness. Such risks could harm our reputation and reduce customer demand and expose us to the potential for litigation from third parties. In the U.S., in particular, the risk of litigation is generally higher than in other parts of our business in areas such as workers’ compensation, general liability, and other related litigation.

 

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Although we maintain insurance we believe to be sufficient to cover estimated health and safety risks including product liability, health and safety in our operations, vehicle and driver related claims and other types of claims in various jurisdictions, there can be no assurance that such insurance will provide adequate coverage against potential claims. If we do not have adequate contractual indemnification or insurance available, such claims could have a material adverse effect on our business, financial condition and results of operations.

We occupy most of our facilities under non-cancelable leases with terms of 10 years or less. We may be unable to renew leases on favorable terms or at all. Also, when we close a facility, we may remain obligated under the applicable lease.

Most of our branches are located in leased premises. Many of our current leases are non-cancelable and typically have initial terms of around 5 to 10 years, with options to renew for specified periods of time. There can be no assurance that we will be able to renew our current or future leases on favorable terms or at all which could have an adverse effect on our ability to operate our business and on our results of operations. In addition, we make decisions to close certain facilities from time to time. When we close or cease to use a facility, we generally remain committed to perform our obligations under the applicable lease, which include, among other things, payment of the base rent for the balance of the lease term.

We have risks related to the management and protection of our facilities and inventory, including risks of personal injury to customers, suppliers or associates.

We have office, showroom, counter, warehouse and distribution facilities located in all regions in which we operate which may be subject to a risk for crimes that could impact our operations, financial performance or reputation. No security or audit program is 100% effective. There is a risk that our security programs will not prevent the occurrences of crimes of break-ins, theft, property damage, and workplace violence, including violent criminal acts such as interpersonal violence or an active shooter or mass casualty/damage event. Moreover, such programs may not be implemented as intended. In the current climate of geopolitical uncertainty and social unrest, a security compromise could result in significant facility damage or loss, loss of inventory or personal injury to customers, suppliers or associates. There is a risk that inventory controls and facility security will fail resulting in inventory shrinkage or loss due to inadequate inventory tracking or misconduct of associates, customers, vendors or other third parties. Moreover, our inventory is located across our distribution facilities and branches and the disaggregated nature of our inventory could result in a failure to accurately record the existence and condition of our inventory. Any such security incidents, inventory loss or failure to maintain accurate records related to our inventory could have a negative effect on our business, financial condition, results of operations or reputation.

Regulatory and legal

Changes in tax law or interpretations thereof may adversely affect us or our shareholders.

U.S. and non-U.S. tax rules are constantly under review by governments and tax authorities, including the Internal Revenue Service (“IRS”) and the U.S. Treasury Department. Our tax treatment is subject to changes in tax laws, regulations and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate, as well as tax policy initiatives and reforms related to the Organisation for Economic Cooperation and Development’s, Base Erosion and Profit Shifting, Project, (including “BEPS 2.0”), including the imposition of a global minimum tax for multinational companies of 15 percent, the European Commission’s state aid investigations and other initiatives. Such changes may include (but are not limited to) the taxation of operating income, investment income, dividends received or (in the specific context of withholding tax) dividends paid, all of which may have retroactive application and could adversely affect our business operations and financial performance. For example, the Tax Cuts and Jobs Act of 2017, the Coronavirus Aid, Relief, and Economic Security Act of 2020 and the Inflation Reduction Act of 2022 (the “U.S. IRA”) enacted many significant changes to the U.S. tax laws. Further guidance from the IRS and other tax authorities with respect to such legislation may affect us, and certain aspects of such legislation could be modified in future legislation. The U.S. IRA includes a minimum tax equal to 15 percent of the adjusted financial statement income of certain corporations, as well as a one percent excise tax on certain stock repurchases by U.S. corporations. While we do not expect the U.S. IRA will have a material adverse effect on our results of operations going forward, we are unable to predict what tax reform may be proposed or enacted in the future, how administrative guidance will be implemented or what effect such changes would have on our business, and it is uncertain if and to what extent various states will conform to federal tax laws. Future tax reform could have a material impact on the value of our deferred tax assets and could increase our future tax expense. It cannot be predicted whether, when, in what form, or with what effective dates, tax laws, regulations and rulings may be enacted, promulgated or issued, which could result in an increase in our or our investors’ tax liability or require changes in the manner in which we operate in order to minimize or mitigate any adverse effects of changes in tax law.

 

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In addition, the location of tax residence of Ferguson plc (which will be renamed Ferguson (Jersey) Limited at the Effective Time) could be challenged. If such entity were to cease, or failed, to maintain its place of central management and control in the location of its tax residency, our ability to rely on specific tax treaty benefits could be impacted, potentially causing withholding taxes on dividends and interest payments made by certain of our subsidiaries to increase while taxes on certain unrealized gains could possibly be imposed.

Our own brand products subject us to certain increased risks such as regulatory, product liability and reputational risks that could have an adverse effect on our business, results of operations and financial condition.

As we expand our own brand product offerings organically and through acquisitions, we may become subject to increased risks due to our greater role in the design, sourcing, marketing and sale of those products. The risks include greater responsibility to administer and comply with applicable regulatory requirements, increased potential product liability and product recall exposure, and increased potential legal and reputational risks related to the responsible sourcing of those products. To effectively execute on our own brand product differentiation strategy, we must also be able to successfully protect our proprietary rights and successfully navigate and avoid claims related to the proprietary rights of third parties. In addition, an increase in sales of our own brand products may adversely affect sales of our suppliers’ products, which in turn could adversely affect our relationships with certain of our suppliers. Further, the development of our own brand products may require us to make investments in specialized personnel and operating systems, increase marketing efforts and reallocate resources away from other uses. Any failure to appropriately address some or all of these risks could damage our reputation and have an adverse effect on our business, results of operations and financial condition.

We are and may continue to be involved in legal proceedings in the course of our business, and while we cannot predict the outcomes of those proceedings and other contingencies with certainty, some of these outcomes may adversely impact our business, financial condition, results of operations and cash flows.

We are and may continue to be involved in legal proceedings such as consumer and employment and other litigation that arises from time to time in the course of our business. In future periods, we could be subject to cash costs or non-cash charges to earnings if any of these litigation matters are resolved on unfavorable terms, or if our estimates regarding legal provisions accounting or our insurance coverage are incorrect. Various factors could cause actual results to differ from these estimates. Following the Merger, stockholders of New TopCo will also be able to pursue derivative actions on behalf of New TopCo, for, among other things, alleged breaches of fiduciary duties by our directors and officers. If we face such litigation, it could result in substantial costs and a diversion of management’s resources and attention, which could harm our business and the value of the New TopCo Common Stock.

Litigation is inherently unpredictable, and the outcome of some of these proceedings and other contingencies could require us to take or refrain from taking actions which could adversely impact the business or could result in excessive verdicts. Any such outcome could have an adverse effect on our business, financial condition, results of operations and cash flows. Additionally, involvement in these lawsuits and related inquiries and other proceedings may involve significant expense, divert management’s attention and resources from other matters, and negatively affect our reputation.

Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters, could significantly affect our financial results or financial condition.

Accounting standards and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, such as revenue recognition and net sales, asset impairment, impairment of goodwill and other intangible assets, inventories, lease obligations, self-insurance, tax matters, pensions and litigation, are complex and involve many subjective assumptions, estimates and judgments. Changes in accounting standards or their interpretation or changes in underlying assumptions and estimates or judgments could significantly change our reported or expected financial performance or financial condition.

We are subject to various risks related to the local and international nature of our business, including domestic and foreign laws, regulations and standards. Failure to comply with such laws and regulations or the occurrence of unforeseen developments such as litigation could adversely affect our business.

Our business operates in the U.S. and Canada and is subject to specific risks of conducting business in different jurisdictions across these countries and other parts of the world, including China, Taiwan, India, Thailand, Vietnam, Italy, Turkey, and South Korea. Our business is subject to a wide array of domestic and international laws, regulations and standards in jurisdictions where

 

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we operate, including advertising and marketing regulations, anti-bribery and corruption/money laundering laws, anti-competition regulations, data privacy and data protection (including payment card industry data security standards) and cybersecurity requirements (including protection of information and incident responses), consumer protection laws, cash and electronic payment regulations and industry standards, environmental protection laws, foreign exchange controls and cash repatriation restrictions, government business regulations applicable to us as a government contractor selling to federal, state and local government entities, import and export requirements, intellectual property laws, labor laws, product compliance laws, fleet and driver related laws, supplier regulations regarding the sources of supplies or products, tax laws, zoning laws, unclaimed property laws and laws, regulations and standards applicable to other commercial matters. In particular, occupational health and safety or consumer product safety regulation may require that we take appropriate corrective action, including but not limited to product recall, in respect of products that we have distributed. Managing a product recall or other corrective action can be expensive and can divert the attention of management and other personnel for significant time periods. Any product recall or other corrective action may negatively affect customer confidence in our products and us, regardless of whether it is successfully implemented. Moreover, we are also subject to audits and inquiries by government agencies in the normal course of business.

In recent years, a number of new laws and regulations have been adopted, and there has been expanded enforcement of certain existing laws and regulations by federal, state and local agencies. These laws and regulations, and related interpretations and enforcement activity, may change as a result of a variety of factors, including political, economic or social events. Changes in, expanded enforcement of, or adoption of new federal, state or local laws and regulations could increase our costs of doing business or impact our operations, including, among other factors, as a result of required investments in technology and the development of new operational processes.

Failure to comply with any of these laws, regulations and standards could result in civil, criminal, monetary and non-monetary penalties as well as potential damage to our reputation. Furthermore, while we have implemented policies and procedures designed to facilitate compliance with these laws, regulations and standards, there can be no assurance that associates, contractors or agents will not violate such laws, regulations and standards or our policies. Any failure to comply with or violation of the various laws, regulations and standards to which we are subject could individually or in the aggregate materially adversely affect our business, financial condition, results of operations and cash flows.

Risks Related to the Ownership of New TopCo Common Stock

The obligations associated with being a public company in the U.S. require significant resources and management attention and increase our legal and financial compliance costs, and changing laws, regulations and standards are creating uncertainty for U.S. public companies.

Ferguson is and, subject to the consummation of the Merger, New TopCo will be subject to the reporting requirements of the U.S. Securities Exchange Act and the Sarbanes-Oxley Act, the listing requirements of the NYSE, and other applicable securities rules and regulations. The U.S. Securities Exchange Act requires that we file annual and other reports with respect to our business, financial condition and results of operations. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting.

The establishment and the maintenance of the corporate infrastructure demanded of a U.S. public company may, in certain circumstances, divert management’s attention from implementing our strategy to drive profitable growth, which could prevent us from improving our business, financial condition and results of operations. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems in order to meet our reporting obligations as a public company in the U.S. with domestic issuer status. However, the measures we take may not be sufficient to satisfy these obligations. In addition, compliance with these rules and regulations have increased our legal and financial compliance costs and have made some activities more time-consuming and costly. These additional obligations may have a material adverse impact on our business, financial condition, results of operations and cash flow.

In addition, changing laws, regulations and standards relating to corporate governance, ESG matters, and public disclosure are creating uncertainty for public companies in the U.S., increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We have invested, and expect to continue to invest, resources to comply with evolving laws, regulations and standards, and this investment may result in increased operating expenses and a diversion of management’s time and attention from sales-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business, financial condition, results of operations and cash flow could be adversely affected.

 

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Corporate responsibility, specifically related to ESG matters, may impose additional costs and expose us to new risks.

Public ESG and sustainability reporting is becoming more broadly expected by regulators, investors, shareholders and other third parties. Ongoing focus on ESG matters by investors and other parties as described below may impose additional costs or expose us to new risks. If we do not adapt to or comply with investor or other stakeholder expectations and standards on ESG matters as they continue to evolve, and as they may diverge, or if we are perceived to have not responded appropriately or quickly enough to growing concern for ESG and sustainability issues, regardless of whether there is a regulatory or legal requirement to do so, we may suffer from reputational damage and our business, financial condition and/or the market price of New TopCo Common Stock could be materially and adversely affected.

Certain organizations that provide corporate governance and other corporate risk information to investors and shareholders have developed, and others may in the future develop, scores and ratings to evaluate companies and investment funds based upon ESG or “sustainability” metrics. Many investment funds focus on positive ESG business practices and sustainability scores when making investments and may consider a company’s ESG or sustainability scores as a reputational or other factor in making an investment decision. In addition, investors, particularly institutional investors, use these scores to benchmark companies against their peers, and if a company is perceived as lagging, these investors may engage with such company to improve ESG disclosure or performance and may also make voting decisions or take other actions to hold these corporations and their boards of directors accountable. Board diversity and climate change ESG topics have, in particular, received heightened attention from investors, shareholders, lawmakers and listing exchanges. In addition, the SEC has proposed rule changes that would require registrants to include certain climate-related disclosures in their registration statements and periodic reports, including greenhouse gas emission data with third-party attestation and climate-related financial statement metrics in a note to their audited financial statements. The adoption and expansion of ESG-related legislation and regulation may also result in increased capital expenditures and compliance, operational and other costs to us. We may face reputational damage in the event our corporate responsibility initiatives or objectives, including with respect to board diversity or climate, do not meet the standards set by our regulators, investors, shareholders, lawmakers, listing exchanges or other constituencies, or if we are unable to achieve an acceptable ESG or sustainability rating from third-party rating services. A low ESG or sustainability rating by a third-party rating service could also result in the exclusion of New TopCo Common Stock from consideration by certain investors who may elect to invest with our competition instead.

In addition, as we work to align with the recommendations of the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures, the Sustainability Accounting Standards Board, and our own ESG assessments and priorities, we have expanded and, in the future, may continue to expand our disclosures in these areas. These ESG reporting disclosure frameworks and reporting standards continue to evolve. Our selection of disclosure frameworks and reporting standards and information voluntarily disclosed may change from time to time and may result in a lack of consistent or meaningful comparative data from period to period, as well as significant revisions to ESG goals, initiatives, commitments, or objectives or reported progress in achieving the same. Our failure to report accurately or achieve progress on our ESG-related goals, targets or metrics on a timely basis, or at all, could adversely affect our reputation, business, financial condition and results of operations. Statements regarding our ESG-related goals reflect our current plans and aspirations; our ESG-related policies, practices and goals are voluntary and subject to change at our discretion. Further, our initiatives and goals may not be favored by certain stakeholders, whose priorities and expectations may not align or may be opposed to one another, and could impact the attraction and retention of investors, customers and employees. Efforts to achieve our initiatives and goals, including collecting, measuring and reporting ESG information, involve operational, reputational, financial, legal and other risks and may result in additional costs or delays, and as a result may have a negative impact on us, including our brand, reputation and the market price of New TopCo Common Stock.

Following the consummation of the Merger, the price of New TopCo Common Stock may be subject to market price volatility and its market price may decline disproportionately in response to developments that are unrelated to our operating performance.

The market price of Ferguson Shares has been and, subject to the consummation of the Merger, the New TopCo Common Stock may in the future be volatile and subject to wide fluctuations. The market price of New TopCo Common Stock may fluctuate as a result of a variety of factors including, but not limited to, general economic and political conditions, period to period variations in operating results, changes in net sales or net income estimates by us, industry participants or financial analysts, our failure to meet our stated guidance, our failure to comply with the rules under the Sarbanes-Oxley Act related to accounting controls and procedures, the discovery of material weaknesses and other deficiencies in our internal control and accounting procedures, and the other factors discussed in “—Risks Related to Our Business.” If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, when required, investor confidence in us may be adversely affected and, as a result, the value of New TopCo Common Stock may decline.

 

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Furthermore, while New TopCo is expected to maintain a standard listing on the LSE in addition to its primary listing on the NYSE, there may be volatility in our share price as a result of the turnover in our shareholder base to the U.S. in connection with the Merger. In addition, the market price of New TopCo Common Stock could also be adversely affected by developments unrelated to our operating performance, such as the operating and share price performance of other companies that investors may consider comparable to us, speculation about us in the press or the investment community, unfavorable press, strategic actions by competitors (including acquisitions and restructurings), changes in market conditions, regulatory changes, broader market volatility and movements and delay in our inclusion in North American indices. Any or all of these factors could result in material fluctuations in the market price of New TopCo Common Stock, which could lead to investors getting back less than they invested or a total loss of their investment. In addition, where the market price of a company’s shares have been volatile, the shareholders of such company may file securities class action litigation against that company based on various claims such as securities fraud and other violations of securities laws. While we have not been a target of this type of litigation, we may be in the future. The defense and disposition of litigation of this type could result in substantial costs and divert resources and the time and attention of our management, which could materially and adversely affect our business or financial condition.

New TopCo Common Stock is expected to be listed to trade on more than one stock exchange, and this may result in price variations.

Following the consummation of the Merger, New TopCo Common Stock is expected to be listed on both the NYSE and the LSE. Dual-listing may result in price variations between the exchanges due to a number of factors. New TopCo Common Stock is expected to trade in USD on the NYSE and in GBP on the LSE. In addition, the exchanges are open for trade at different times of the day and the two exchanges also have differing vacation schedules. Differences in the trading schedules, as well as volatility in the exchange rate of the two currencies, among other factors, may result different trading prices for New TopCo Common Stock on the two exchanges. Other external influences may have different effects on the trading price of New TopCo Common Stock on the two exchanges.

 

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SPECIAL MEETING OF FERGUSON

General

Ferguson is furnishing this proxy statement/prospectus to Ferguson Shareholders as part of the solicitation of proxies by the Ferguson Board for use at the Special Meeting to be held on [May 30], 2024, and at any adjournment thereof. This proxy statement/prospectus is first being furnished to Ferguson Shareholders on or about     , 2024 in connection with the vote on the Proposals described in this proxy statement/prospectus. This proxy statement/prospectus provides Ferguson Shareholders with information they need to know to be able to vote or instruct their vote to be cast at the Special Meeting.

Date, Time, and Place of Special Meeting

The Special Meeting will be held at [10:00 a.m.] Eastern Time ([3:00 p.m.] U.K. Time) on [May 30], 2024 at the offices of Freshfields Bruckhaus Deringer LLP, located at 100 Bishopsgate, London, EC2P 2SR, U.K.

Voting Power; Record Date

Registered shareholders. Ferguson, pursuant to Article 186(b) of the Ferguson Articles, has specified that only those persons entered on the register of members of Ferguson as of the Record Date (or, if the Special Meeting is adjourned, on the register of members of Ferguson not less than 10 days nor more than 60 days before the time of the adjourned meeting) are entitled to attend and vote at the Special Meeting. Subsequent changes to the entries on the register of members of Ferguson after the Record Date will be disregarded in determining the rights of any person to attend or vote at the Special Meeting. In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders. Seniority is determined by the order in which the names of the holders stand in the register. Registered shareholders must present photographic identification to attend and vote at the Special Meeting. All joint shareholders may attend and speak. Any corporate entity which is a shareholder can appoint one or more representatives who may exercise all of its powers on its behalf.

Beneficial owners. If your shares are held in a stock brokerage account or by a broker, bank or other nominee, you are considered the beneficial owner of the shares, and this proxy statement/prospectus is being made available or forwarded to you by or on behalf of your broker, bank or other nominee. Only those beneficial owners holding shares as of the Record Date or, if the Special Meeting is adjourned, on such other date as is communicated to beneficial owners are entitled to vote on the resolutions in respect of such shares. As a beneficial owner, if you wish to attend or vote at the Special Meeting, you must obtain a legal proxy from your broker, bank or other nominee and present it, along with photographic identification, to Ferguson’s Company Secretary or other Ferguson representative, at the Special Meeting.

U.K. DI Holders. If you are a U.K. DI Holder entered on the register of U.K. DI Holders of Ferguson as of 6:00 p.m. U.K. Time on [May 23], 2024 (or, if the Special Meeting is adjourned, on such other date as is communicated to U.K. DI Holders), you are entitled to provide voting instructions to the Depositary in respect of the number of U.K. DIs registered in your name at that time. As a U.K. DI Holder, or as a representative of a U.K. DI Holder, if you wish to attend or vote at the Special Meeting, please inform the Depositary at csnditeam@computershare.co.uk. The Depositary will then provide you with a Letter of Representation with respect to the relevant U.K. DI holding that will enable a U.K. DI Holder, or a representative, to attend, speak and vote the shares underlying those interests at the Special Meeting. The completed Letter of Representation must be delivered to a Depositary representative by 10:00 a.m. U.K. Time on [May 23], 2024. To attend, speak or vote at the Special Meeting, you must bring this Letter of Representation and present it, along with photographic identification, to Ferguson’s Company Secretary or other Ferguson representative at the Special Meeting. Any U.K. DI Holders that do not follow the above process will be unable to represent their position in person at the Special Meeting.

For additional information, see “Questions and Answers—Questions and Answers About the Special Meeting—Who May Attend and Vote?”

Purpose of the Special Meeting

At the Special Meeting, Ferguson is asking Ferguson Shareholders to vote upon the following proposals:

 

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Proposal No. 1: The Merger Proposal—to consider and vote upon a proposal to approve the Merger Agreement by and among Ferguson plc, New TopCo, and Merger Sub, a copy of which is attached to this proxy statement/prospectus as Annex A. The Merger Agreement provides for, among other things, the merger of Merger Sub with and into Ferguson plc, with Ferguson plc surviving the Merger as a direct, wholly owned subsidiary of New TopCo and Merger Sub

 

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ceasing to exist at the Effective Time and on the terms of and subject to the conditions of the Merger Agreement which contains, among other things, a proposed merger of Ferguson plc and Merger Sub under Part 18B (Mergers) of the Jersey Companies Law, as more fully described elsewhere in this proxy statement/prospectus. Your approval of the Merger Proposal will constitute your approval of the Merger Agreement and the transactions contemplated thereby, including the Merger;

 

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Proposal No. 2: Advisory Organizational Documents Proposals—on an advisory basis, consider and vote upon the following eight separate proposals to approve, assuming the Merger Proposal is approved, the following differences between the Ferguson Governing Documents and the New TopCo Proposed Organizational Documents, each to be effective upon the Merger:

 

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Advisory Organizational Documents Proposal 2.A—on an advisory basis, to authorize provisions in the New TopCo Proposed Certificate of Incorporation and New TopCo Proposed Bylaws under which, (i) the New TopCo Proposed Certificate of Incorporation, once adopted, may be amended, altered or repealed in the manner prescribed by the DGCL and (ii) the New TopCo Proposed Bylaws, once adopted, may be amended, altered or repealed from time to time by the stockholders of New TopCo by the affirmative vote of holders of a majority of the voting power of the then outstanding shares of New TopCo entitled to vote thereon, and such additional vote as may be required by the New TopCo Proposed Certificate of Incorporation;

 

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Advisory Organizational Documents Proposal 2.B—on an advisory basis, to authorize provisions in the New TopCo Proposed Bylaws that provide that the New TopCo Proposed Bylaws, once adopted, may be amended, altered or repealed from time to time by the New TopCo Board without seeking any approval by the New TopCo stockholders, in accordance with the DGCL;

 

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Advisory Organizational Documents Proposal 2.C—on an advisory basis, to authorize provisions in the New TopCo Proposed Certificate of Incorporation and the New TopCo Proposed Bylaws that provide that all vacancies on the New TopCo Board will be filled solely and exclusively by the affirmative vote of a majority of the remaining directors then in office, and not by the stockholders;

 

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Advisory Organizational Documents Proposal 2.D—on an advisory basis, to authorize provisions in the New TopCo Proposed Bylaws relating to the right of New TopCo stockholders to request a special meeting of New TopCo stockholders;

 

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Advisory Organizational Documents Proposal 2.E—on an advisory basis, to authorize provisions in the New TopCo Proposed Certificate of Incorporation limiting personal liability of New TopCo directors and certain officers for monetary damages for breach of fiduciary duty as a director or as an officer to the fullest extent permitted under the DGCL;

 

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Advisory Organizational Documents Proposal 2.F—on an advisory basis, to authorize the exclusive forum provisions in the New TopCo Proposed Certificate of Incorporation;

 

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Advisory Organizational Documents Proposal 2.G—on an advisory basis, to authorize the New TopCo Board to issue up to 100,000 shares of New TopCo Preferred Stock in one or more series, with such terms and conditions and at such future dates as may be expressly determined by the New TopCo Board and as may be permitted by the DGCL; and

 

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Advisory Organizational Documents Proposal 2.H—on an advisory basis, to authorize the New TopCo Board to issue new shares of New TopCo Common Stock in the future without offering pre-emptive rights.

Quorum

A Ferguson Shareholder who holds, or Ferguson Shareholders together who hold, a majority of the shares entitled to be voted at the Special Meeting, present in person or represented by proxy, will constitute a quorum. A quorum is necessary to conduct business at the Special Meeting. You will be part of the quorum if you timely return a properly executed proxy appointment form. Abstentions also are counted in determining whether a quorum is present. As of the Record Date,    Ferguson Shares would be required to achieve a quorum. As of such date, our directors and executive officers and their affiliates directly owned, in the aggregate, approximately    of such shares. This represents approximately    % of the outstanding Ferguson Shares as of such date.

Abstentions and Broker Non-Votes

For purposes of the Special Meeting, an abstention occurs when you attend the meeting in person and do not vote or return a proxy with an “abstain” vote.

 

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Abstentions will be counted for the purpose of determining the presence or absence of a quorum, but will not be counted for the purpose of determining the number of votes cast on a given proposal. If you attend the Special Meeting and you fail to vote on the Merger Proposal or the Advisory Organizational Documents Proposals, no votes attaching to your shares will be counted for the purposes of determining whether the resolutions are passed, so that your failure to vote will have no effect on the Proposals. If you hold Ferguson Shares directly and sign and return your proxy card without indicating how to vote on any particular Proposal, the Ferguson Shares represented by your proxy will be voted “FOR” each of the Proposals presented at the Special Meeting and in the discretion of your proxy upon such other matters as may properly come before the Special Meeting.

If you are a beneficial owner, you must instruct your broker, bank or other nominee how to vote your shares. Under NYSE rules, brokers are only permitted to exercise discretionary voting authority on “routine” matters when voting instructions have not been received from a beneficial owner. On matters considered “non-routine,” brokers may not vote shares without instruction from the beneficial owner. Shares that brokers are not authorized to vote are referred to as “broker non-votes.” We believe all Proposals presented at the Special Meeting are “non-routine” matters and, therefore, anticipate that there will be no “broker non-votes.”

Please note that if you want your vote to be counted on any of the Proposals, you must instruct your broker, bank or other nominee how to vote your shares. If you do not provide voting instructions, no votes will be cast on your behalf with respect to the Proposals.

If you are a U.K. DI Holder, the Depositary will not vote your shares on your behalf on any matter without instructions from you as the U.K. DI Holder.

Vote Required for Approval

 

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The Merger Proposal: The Merger Proposal is proposed as a special resolution, which means that for this resolution to be passed at least two-thirds (662/3%) of the total number of votes cast on this resolution must be cast in favor of this resolution. Your approval of the Merger Proposal will constitute your approval of the Merger Agreement and the transactions contemplated thereby, including the Merger.

 

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The Advisory Organizational Documents Proposals (2.A through 2.H): Each of the Advisory Organizational Documents Proposals are being proposed separately, on an advisory basis, as an ordinary resolution, which means that for each resolution to be passed more than half of the votes cast must be cast in favor of such resolution.

It is important for Ferguson Shareholders to note that, in the event that the Merger Proposal does not receive the requisite shareholder vote for approval, Ferguson will not consummate the Merger. The consummation of the Merger is conditioned on the approval of the Merger Proposal. With respect to the Advisory Organizational Documents Proposals, although Ferguson is seeking a shareholder vote on such Proposals, a vote for each such Proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board, and approval of such Proposals is also not a condition to the closing of the Merger. However, Ferguson values the opinions expressed by shareholders and will consider the outcome of the vote on the Advisory Organizational Documents Proposals when making future decisions relating to the corporate governance practices of New TopCo.

Recommendation of the Ferguson Board

The Ferguson Board believes that each of the Proposals to be presented at the Special Meeting are advisable and in the best interests of Ferguson and the Ferguson Shareholders and unanimously recommends that the Ferguson Shareholders vote “FOR” the Merger Proposal and “FOR” each of the Advisory Organizational Documents Proposals.

Voting Your Shares

Registered Shareholders

Registered shareholders may vote by proxy before the Special Meeting using one of the following three methods or may attend the Special Meeting and vote in person by ballot:

 

1.

by internet at www.proxyvote.com using your Control Number set out on the proxy card you received and following the instructions on the website,

 

2.

by telephone at 1-800-690-6903 using your Control Number and following the recorded instructions (international charges apply outside of the U.S. and Canada), or

 

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3.

by mail by following the instructions on your proxy card and returning your completed proxy card in the postage-paid envelope accompanying your proxy materials.

In each case, your vote by internet or telephone or your completed proxy card must be received by 11:59 p.m. Eastern Time on [May 27], 2024 (4:59 a.m. U.K. Time on [May 28], 2024).

Your proxy card must be signed and dated by you, or your attorney duly authorized in writing or, if you are a corporate shareholder, must be executed under your company common seal or under the hand of a duly authorized officer or attorney of your company or in any other manner authorized by your company’s constitution. Any power of attorney or any other authority (if any) under which the proxy card is executed (or a duly certified copy of such power or authority) must be submitted with the proxy card. In the case of joint holders (i) only one need sign, and (ii) the vote of the senior holder who tenders a vote, whether in person or by proxy, will alone be counted. Seniority is determined as described herein under “—Voting Power; Record Date.”

If you are a holder based in the U.K., you may return your proxy card(s) in the U.K. by following the instructions on the proxy card.

Beneficial Owners

Beneficial owners may direct their broker, bank or other nominee on how to vote their shares by following the instructions for voting on the voting instruction form provided by your broker, bank or other nominee. If you do not direct your broker, bank or other nominee on how to vote your shares by following the instructions on your voting instruction form, your shares will not be voted at the Special Meeting as we believe that under the rules of the NYSE all matters presented at the Special Meeting will be considered “non-routine” and your broker will not have discretionary authority to vote your shares on any of these matters. Accordingly, we encourage you to communicate your voting decisions to your broker, bank or other nominee by the time prescribed by your broker, bank or other nominee and well in advance of the deadline for voting of 11:59 p.m. Eastern Time on [May 27], 2024 (4:59 a.m. U.K. Time on [May 28], 2024) to ensure that your vote will be counted. If you wish to vote in person by ballot at the Special Meeting, you must obtain a legal proxy from your broker, bank or other nominee as described herein under “Questions and Answers—Questions and Answers About the Special Meeting—Who May Attend and Vote?”.

U.K. DI Holders

U.K. DI Holders may direct the Depositary to vote the shares represented by their U.K. DIs in three ways:

 

1.

By internet-Instruct Computershare. Complete a Form of Instruction accessible via the internet on the Depositary’s website by visiting www.eproxyappointment.com. You will need your Control Number, your Shareholder Reference Number and your unique PIN, which are available on the Form of Instruction that U.K. DI Holders will have received in the mail. Instructions must be received by 3:00 p.m. U.K. Time on [May 23], 2024.

 

2.

By internet-CREST. Issue an instruction through the CREST electronic voting appointment service using the procedures described in the CREST manual (available from www.euroclear.com). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider, should refer to their CREST sponsor or voting services provider, who will be able to take the appropriate action on their behalf.

For instructions made using the CREST service to be valid, the appropriate CREST message (a CREST Voting Instruction) must be properly authenticated in accordance with the specifications of Euroclear U.K. & International Limited (“EUI”) and must contain the information required for such instructions, as described in the CREST manual. The message, regardless of whether it relates to the voting instruction or to an amendment to the instruction given to the Depositary must be transmitted so as to be received by Ferguson’s agent (ID 3RA50) no later than 3:00 p.m. U.K. Time on [May 23], 2024. The time of receipt will be taken to be the time (as determined by the timestamp applied to the CREST Voting Instruction by the CREST applications host) from which Ferguson’s agent is able to retrieve the CREST Voting Instruction by enquiry to CREST in the manner prescribed by CREST.

EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations apply to the transmission of a CREST Voting Instruction. It is the responsibility of the CREST member to take (or to procure that the CREST sponsor or voting service provider takes) such action necessary to ensure that a CREST Voting Instruction is transmitted by any particular time. CREST members and, where applicable, their CREST sponsors or voting service providers, are referred to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. Ferguson may treat as invalid a CREST Voting Instruction in the circumstances set out in Regulation 35 of the Uncertificated Securities Regulations 2001 (S.I. 2001 No. 3755).

 

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3.

By mail. Complete and return a Form of Instruction to the Depositary using the reply-paid envelope that accompanied the Form of Instruction or by posting it to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ, U.K. To be effective, all Forms of Instruction must be received by the Depositary by 3:00 p.m. U.K. Time on [May 23], 2024. The Depositary, as your proxy, will then make arrangements to vote your underlying shares according to your instructions.

Revoking Your Proxy

Registered shareholders. Registered shareholders may revoke their proxies or change their voting instructions by submitting a new proxy appointment via internet, telephone or mail that is dated later than the original proxy or by delivering written notice of revocation to Ferguson’s Company Secretary, which revocation or change must be received by 11:59 p.m. Eastern Time on [May 27], 2024 (4:59 a.m. U.K. Time on [May 28], 2024). If you are a registered shareholder, you may also revoke your proxies or change your vote by voting online at www.proxyvote.com or in person by ballot during the Special Meeting, in either case before the poll is closed. If more than one properly executed proxy appointment form is returned in respect of the same holding of shares, either by paper or by electronic communication (except as described above under “Questions and Answers—Questions and Answers About the Special Meeting—Can I appoint more than one proxy ”), the proxy appointment form received last by Broadridge Financial Solutions, Inc. (“Broadridge”) before the latest time for the receipt of such proxies will take precedence.

Beneficial owners. Beneficial owners should contact their broker, bank or other holder of record for instructions on how to revoke their proxies or change their vote.

U.K. DI Holders. U.K. DI Holders should contact the Depositary for instructions on how to revoke their proxies or change their vote.

Dissenters’ Rights

Pursuant to Article 127FB of the Jersey Companies Law, following the approval by Ferguson Shareholders of the Merger, you have the right to apply to the Royal Court on the grounds that the Merger would unfairly prejudice your interests.

An application to the Royal Court objecting to the Merger may not be made: (i) more than 21 days after the Merger has been approved by the Ferguson Shareholders; or (ii) if you voted in favor of the Merger. The Jersey Companies Law does not preclude a member who fails to vote on the Merger from making such an application. In view of this, dissenters and abstainers may bring such an application to court.

On an application to the Royal Court in objection of the Merger, the Royal Court may, if satisfied that such application is well-founded, make an order as it thinks fit for giving relief in respect of the matters complained of. Such order will typically be tailored to the relief sought by the applicant but may include a restraint on the Merger, impose conditions on the Merger or provide for the purchase of the shares of the applicant Ferguson Shareholder by other members of Ferguson or Ferguson itself.

Additional Matters

The Ferguson Board does not know of any other matters to be presented at the Special Meeting. The form of proxy accompanying this proxy statement/prospectus confers discretionary authority upon the named proxy holder with respect to amendments or variations to the matters identified in the accompanying Notice of Extraordinary General Meeting and with respect to any other matters that may properly come before the Special Meeting. If any additional matters are properly presented at the Special Meeting, or at any adjournments or postponements of the Special Meeting, the person named in the enclosed proxy card will have discretionary authority to vote the shares on any such matters.

Who Can Answer Your Questions About Voting Your Shares

Shareholders who have questions about how to vote or direct a vote in respect of Ferguson Shares or need assistance in completing or submitting their proxy cards should contact Morrow Sodali, Ferguson’s proxy solicitor, at 800-662-5200, or banks and brokers can call collect at 203-658-9400, or by emailing ferg.info@investor.morrowsodali.com. U.K. DI Holders who have questions about how to vote or direct a vote in respect of U.K. DIs or need assistance in completing or submitting their proxy cards should contact the Depositary at +44 906 999 0000.

Proxy Solicitation Costs

Ferguson is furnishing this proxy statement/prospectus to Ferguson Shareholders as part of the solicitation of proxies by the Ferguson Board for use at the Special Meeting to be held on [May 30], 2024, and at any adjournment thereof. This solicitation is

 

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being made by mail but also may be made by telephone, the internet, facsimile, e-mail or in person. Ferguson has hired Morrow Sodali to assist in the proxy solicitation process. Ferguson will pay Morrow Sodali approximately $15,000 for its proxy solicitation services, plus reasonable out-of-pocket expenses incurred in the process of solicitating proxies. In addition, Ferguson will reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for sending proxy materials to shareholders and obtaining their proxies. Furthermore, proxies may be solicited by Ferguson’s directors, officers and associates, in each case without any additional compensation. Ferguson and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. Ferguson will bear the cost of any such solicitation.

 

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PROPOSAL NO. 1—THE MERGER PROPOSAL

Overview

Ferguson Shareholders are being asked to consider and vote upon a proposal to approve the Merger Agreement, a copy of which is attached to this proxy statement/prospectus as Annex A, and approve the transactions contemplated thereby. This section describes the material terms of the Merger Agreement. The description in this section and elsewhere in this proxy statement/prospectus is qualified in its entirety by reference to the complete text of the Merger Agreement. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. You are encouraged to read the Merger Agreement carefully and in its entirety. This section is not intended to provide you with any factual information about Ferguson or New TopCo. Such information can be found elsewhere in this proxy statement/prospectus.

You are urged to read the Merger Agreement carefully and in its entirety before voting on the Merger Proposal. Your approval of the Merger Proposal will constitute your approval of the Merger Agreement and the transactions contemplated thereby, including the Merger. If the Merger is consummated, the New TopCo Proposed Organizational Documents and the DGCL will govern New TopCo and your rights as a stockholder of New TopCo instead of the Ferguson Governing Documents and the Jersey Companies Law. Accordingly, in addition to the information provided below, you should also carefully consider the differences between the Ferguson Governing Documents and the New TopCo Proposed Organizational Documents described in the “Comparison of Corporate Governance and Shareholder Rights” section beginning on page 108 of the proxy statement/prospectus.

The Merger

If the Merger Proposal is approved by the Ferguson Shareholders, at the Effective Time, on the terms of and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into Ferguson plc, with Merger Sub ceasing to exist and Ferguson plc continuing as the surviving entity (the “Surviving Entity”). The Surviving Entity will be named “Ferguson (Jersey) Limited,” will change its status to a private company, and will be a direct, wholly owned subsidiary of New TopCo. As a result of the Merger, the separate existence of Merger Sub will cease at the Effective Time, and all property, rights, privileges, powers and franchises of Merger Sub will vest in the Surviving Entity at the Effective Time, and all debts, liabilities and duties of Merger Sub will become the debts, liabilities and duties of the Surviving Entity at the Effective Time. If the Merger is consummated, Ferguson Shareholders will become stockholders of New TopCo pursuant to the terms and conditions discussed in greater detail in this proxy statement/prospectus.

Reasons for the Proposal

Since 2019, the Ferguson Board has considered North America to be the best long-term location for Ferguson plc and has worked methodically and transparently with shareholders on this transformative journey, creating an additional listing on the NYSE in 2021, and then moving Ferguson plc’s primary listing from London to New York in 2022. During this period, approximately two-thirds of Ferguson plc’s shareholder base has become American and Ferguson plc has been considered a U.S. domestic issuer under the applicable SEC rules since August 1, 2023.

On December 5, 2023, Ferguson plc announced that it was considering a new corporate structure to domicile the Ferguson group of companies’ ultimate parent company in the U.S., which would better align its headquarters and governance with its operations and leadership. The Ferguson Board considered the expected benefits and the potential advantages of the Merger, as well as considered a variety of negative factors, including the possibility of uncertainty created by the Merger and the change in our legal domicile, the fact that we expect to incur costs to complete the Merger, the fact that Delaware corporate law imposes different and additional obligations on us, the anticipated one-time, non-cash deferred tax charge of between $75 million to $135 million upon shareholder approval of the Merger generated by the loss of benefits related to certain tax attributes, the expectation that future taxable income generated in the U.K. may not be sufficient to fully realize the tax benefits associated with certain future expenses, the anticipated immaterial impact on our effective tax rate beyond the one-time charge and certain future expenses discussed above, the expected withholding tax on dividends to certain Non-U.S. Holders and other risks discussed in the discussion under “Risk Factors.” However, the Ferguson Board does not foresee any material downsides to the Merger. The Ferguson Board believes that the Merger will enhance shareholder value over the long term by simplifying Ferguson’s corporate governance requirements.

After completing its review and having fully considered the associated steps needed to complete the Merger, on January 17, 2024, the Ferguson Board concluded that it would be in the best interests of Ferguson plc and its shareholders as a whole to proceed with establishing the new corporate structure and publicly announced this decision on January 18, 2024.

 

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Following detailed review of the Merger Agreement and this proxy statement/prospectus, which was prepared by management and external advisors, on February 29, 2024, the Ferguson Board unanimously (1) determined that the Merger, on the terms of and subject to the conditions of the Merger Agreement, is advisable and in the best interests of Ferguson and Ferguson Shareholders, (2) directed that the Proposals set forth in this proxy statement/prospectus be submitted to Ferguson Shareholders for approval at the Special Meeting on the date and at the time and place set forth in this proxy statement/prospectus and (3) recommended that Ferguson Shareholders vote or give instruction to vote “FOR” the Merger Proposal and “FOR” each of the Advisory Organizational Documents Proposals.

The Merger Agreement

Conditions to the Merger

Under the Merger Agreement the Merger is conditioned upon:

 

•

Ferguson having given notice to all of its creditors (if any) in accordance with Article 127FC(1) of the Jersey Companies Law and having published the contents of such notice in accordance with Article 127FC(5) of the Jersey Companies Law, and each applicable date as set out in Article 127FJ(3) of the Jersey Companies Law having passed;

 

•

Merger Sub having given notice to all of its creditors (if any) in accordance with Article 127FC(1) of the Jersey Companies Law and having published the contents of such notice in accordance with Article 127FC(5) of the Jersey Companies Law, and each applicable date as set out in Article 127FJ(3) of the Jersey Companies Law having passed;

 

•

the date as set out in Article 127FJ(3)(a) of the Jersey Companies Law having passed (if applicable);

 

•

the delivery to the registrar of companies in Jersey of all documents required in accordance with Article 127FJ of the Jersey Companies Law for the purposes of effecting the Merger;

 

•

no order by any court or other tribunal of competent jurisdiction will have been entered and will continue to be in effect and no law will have been adopted or be effective, in each case that temporarily or permanently prohibits, enjoins or makes illegal the consummation of the Merger;

 

•

no suit, action or proceeding will have been brought by any governmental entity, and remain pending, that seeks an order that would prohibit, enjoin or make illegal the consummation of the Merger;

 

•

all material consents and authorizations of, filings or registrations with, and notices to, any governmental or regulatory authority required to consummate the Merger, have been obtained or made;

 

•

Ferguson Shareholders will have approved the Merger in accordance with Ferguson Governing Documents and the Jersey Companies Law, as further described in this proxy statement/prospectus;

 

•

Merger Sub will have approved the Merger in accordance with Merger Sub’s memorandum of association and articles of association and the Jersey Companies Law;

 

•

the filing and approval of a U.K. prospectus with respect to the New TopCo Common Stock by the FCA, and such U.K. prospectus having been made available to the public in accordance with the Prospectus Regulation Rules of the FCA; and

 

•

the registration statement on Form S-4, to which this proxy statement/prospectus forms a part, with respect to the New TopCo Common Stock to be issued pursuant to the Merger will be effective, and there will be no stop order suspending such effectiveness.

The expected timing for the completion of the Merger may be impacted by other conditions described in this proxy statement/prospectus. We cannot be certain when, or if, the conditions to the Merger will be satisfied or waived, or that the Merger will be completed.

Change of Name and Status

Pursuant to the Merger Agreement, Ferguson has agreed to:

 

•

change its name from Ferguson plc to “Ferguson (Jersey) Limited” with effect from completion of the Merger; and

 

•

change its status from public company to private company with effect from completion of the Merger.

 

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Treatment of Interests in the Merger

Ferguson Shares and U.K. DIs. On the terms of, subject to the conditions of and/or in connection with the Merger Agreement, at the Effective Time, (i) each Ferguson Share that is issued and outstanding at the Merger Record Time will automatically be cancelled without any repayment of capital and New TopCo will issue as consideration therefor new, duly authorized, validly issued, fully paid and non-assessable shares of New TopCo Common Stock to each Ferguson Shareholder on a one-for-one basis for each Ferguson Share held by such Ferguson Shareholder immediately preceding the Merger Record Time and (ii) each U.K. DI representing an issued and outstanding Ferguson Share at the Merger Record Time will be cancelled and a New TopCo U.K. DI representing one share of New TopCo Common Stock will be issued through CREST by the Depositary as consideration therefor to each holder of U.K. DIs on a one-for-one basis for each U.K. DI held by such holder immediately preceding the Merger Record Time. All Ferguson Shares held in treasury will be cancelled as a result of the Merger.

Surviving Entity Ordinary Shares. At the Effective Time, by virtue of the Merger and without any action on the part of the holder of the outstanding ordinary shares, par value £1.00 per share, of Merger Sub, the authorized share capital of the Surviving Entity will be £10,000 divided into 10,000 ordinary shares of £1.00 each and 1 share of £1.00 in the capital of the Surviving Entity shall be issued to New TopCo.

New TopCo Common Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holder of the outstanding shares of common stock, par value $0.0001 per share, of New Topco, all existing shares of New TopCo Common Stock issued and outstanding immediately preceding the Effective Time will be cancelled and no consideration will be issued in respect thereof.

To the extent that the issuance of New TopCo Common Stock to any Overseas Shareholder may infringe the applicable law or require New TopCo to obtain any governmental or other consent or effect any registration, filing or other formality with which, in the opinion of New TopCo, it would be unable to comply or which it regards as unduly onerous, then the Merger Agreement provides New TopCo the discretion to take such actions as it considers may be necessary or desirable in order to prevent any such infringement from occurring and/or any such requirement from arising (as the case may be). Such actions may include New TopCo determining that New TopCo Common Stock will not be issued to such Overseas Shareholder, but will instead be issued to a nominee appointed by New TopCo, as trustee for such Overseas Shareholder, on terms that such New TopCo Common Stock will, as soon as reasonably practicable following the Effective Time, be sold on behalf of such Overseas Shareholder at the best price which can reasonably be obtained at the time of sale and the net proceeds of such sale will (to the extent permitted by applicable law and after the deduction of all expenses and commissions, including any amount in respect of value added tax payable thereon) be paid to such Overseas Shareholder as soon as reasonably practicable. Overseas Shareholders should inform themselves about and observe all applicable legal requirements.

Representations and Warranties

The Merger Agreement contains certain representations and warranties relating to organization and good standing, due authorization and enforceability of the Merger Agreement, in each case, on the part of Ferguson, New TopCo and Merger Sub.

Termination

The Merger Agreement may be terminated and the Merger abandoned if any of the requirements under the Merger Agreement are not satisfied within 180 days of the date of the Merger Agreement by Ferguson, New TopCo or Merger Sub.

Governing Law

The Merger Agreement will be governed by and construed in accordance with the laws of Jersey.

Management of New TopCo

The persons who currently serve as the directors and executive officers of Ferguson plc (other than Ms. Sammie Long, who will retire from her position at Ferguson, effective July 31, 2024) are expected to serve as the directors and executive officers of New TopCo following the Merger, subject to the appointment, death, resignation or removal of any directors or executive officers on or prior to the Effective Time. See “Management of New TopCo.”

New TopCo has entered into indemnity agreements with its directors and executive officers which provide for indemnification and advancement of expenses to the extent permitted by U.S. laws. New TopCo’s directors and executive officers are also covered under a directors’ and officers’ liability insurance policy. For more information, see “Comparison of Corporate Governance and Shareholder Rights.”

 

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Interests of Certain Persons in the Merger

We do not believe that any of our directors or executive officers have interests in the Merger that are different from the interests of our shareholders generally. No change of control payments or additional compensation will be payable to our directors or executive officers in connection with the Merger.

Comparison of Rights of Ferguson Shareholders with Holders of New TopCo Common Stock

The completion of the Merger will change the governing corporate law that applies to shareholders of our parent company from Jersey law to Delaware law. The legal system governing corporations organized under Delaware law differs from the legal system governing corporations organized under Jersey law. As a result, the New TopCo Proposed Organizational Documents are not identical, or even substantially similar, to the Ferguson Governing Documents. We summarize the material differences between the Ferguson Governing Documents and the New TopCo Proposed Organizational Documents, and the changes in your rights as a shareholder resulting from the Merger, under “Comparison of Corporate Governance and Shareholder Rights.” We believe that these changes (i) either are required by Delaware law or otherwise result from differences between the corporate laws of Jersey and the corporate laws of Delaware, (ii) relate to the change of the place of incorporation of the publicly traded corporate parent of Ferguson from Jersey to Delaware or (iii) align with best practices among Delaware S&P 500 companies. All Ferguson Shareholders are encouraged to read each of the New TopCo Proposed Certificate of Incorporation and the New TopCo Proposed Bylaws, substantially in the form attached hereto as Annex B and Annex C, respectively.

Notwithstanding the differences in the Ferguson Governing Documents and the New TopCo Proposed Organizational Documents, we believe that Delaware law and the New TopCo Proposed Organizational Documents as a whole adequately safeguard the rights of Ferguson Shareholders.

The characteristics of and the differences between the Ferguson Shares and the New TopCo Common Stock are summarized under “Description of Capital Stock of New TopCo After the Merger” and “Comparison of Corporate Governance and Shareholder Rights.”

Regulatory Matters

Other than the delivery to the registrar of companies in Jersey of all documents required in accordance with Article 127FJ of the Jersey Companies Law for the purposes of effecting the Merger, we are not aware of any governmental approvals or actions that are required to complete the Merger other than compliance with U.S. federal and state securities laws, and various portions of Jersey corporate law.

Dissenters’ Rights

Pursuant to Article 127FB of the Jersey Companies Law, following the approval by Ferguson Shareholders of the Merger, you have the right to apply to the Royal Court on the grounds that the Merger would unfairly prejudice your interests.

An application to the Royal Court objecting to the Merger may not be made: (i) more than 21 days after the Merger has been approved by the Ferguson Shareholders; or (ii) if you voted in favor of the Merger. The Jersey Companies Law does not preclude a member who fails to vote on the Merger from making such an application. In view of this, dissenters and abstainers may bring such an application to court.

On an application to the Royal Court in objection of the Merger, the Royal Court may, if satisfied that such application is well-founded, make an order as it thinks fit for giving relief in respect of the matters companied of. Such order will typically be tailored to the relief sought by the applicant but may include a restraint on the Merger, impose conditions on the Merger or provide for the purchase of the shares of the applicant Ferguson Shareholder by other members of Ferguson or Ferguson itself.

Issuance of New TopCo Common Stock after the Merger

Beneficial holders of shares held in “street name” through a bank, broker or other nominee and record owners of shares held in book-entry form will not be required to take any action. Your ownership of shares of New TopCo Common Stock will be recorded in book-entry form by your nominee (for shares held in “street name”) or directly on the New TopCo register to be maintained by Computershare, as our appointed transfer agent (for shares held by record owners in book-entry form), without the need for any additional action on your part. Holders of record who hold their shares in book-entry form will receive a statement of their holdings in New TopCo after the Merger. Holders of Ferguson Shares represented in the form of U.K. DIs will not be required to take any action, with New TopCo U.K. DIs being automatically credited to their CREST participant accounts. To the extent possible, all email addresses, bank account details and shareholder elections recorded by Computershare will remain valid and applied to the share register of New TopCo.

 

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Stock Exchange Listing

The New TopCo Common Stock will be the only outstanding class of stock of New TopCo upon the consummation of the Merger. The New TopCo Common Stock is expected to be listed on the NYSE and the LSE under the trading symbol “FERG.” The Ferguson Shares currently trade on the NYSE and the LSE under the trading symbol “FERG.” When the Merger is completed, the Ferguson Shares currently listed on the NYSE and the LSE under the trading symbol “FERG” will cease to be traded on the NYSE and the LSE, and will be deregistered under the U.S. Securities Exchange Act. On January 17, 2024, the last trading day before Ferguson publicly disclosed its intention to pursue the Merger, the closing price of the Ferguson Shares on the NYSE and LSE was $184.65 and £146.40 per share, respectively. On    , 2024, the last practicable date before the mailing date of this proxy statement/prospectus, the closing price of Ferguson Shares on the NYSE and LSE was $    and £   per share, respectively.

Accounting Treatment of the Merger under U.S. GAAP

The Merger will represent a reorganization of the Company, akin to a transaction between entities under common control. Accordingly, assets and liabilities of Ferguson will be reflected at their carrying amounts in the accounts of New TopCo at the completion of the Merger.

Impact of the Merger on Operating Costs, Tax Attributes and Tax Rate

We do not expect the Merger to have a material effect on our operating costs, including our selling, general and administrative expenses. In connection with the Merger, Ferguson anticipates recognizing a one-time, non-cash deferred tax charge of between $75 million to $135 million upon shareholder approval of the Merger, driven by the elimination of certain pre-existing U.K. tax attributes of Ferguson. In addition, Ferguson anticipates that, following the Merger, the amount of taxable income which it generates in the U.K. may not be sufficient to fully realize the tax benefits associated with certain future expenses (including, without limitation, future contributions to Ferguson’s U.K. pension plans). Apart from the one-time charge and certain future expenses discussed above, the Ferguson Board currently anticipates that the Merger on its own will have an immaterial impact on our effective tax rate, as tax reforms in the U.K. and Switzerland relating to global minimum tax policies are in any event expected to reduce the benefit of our current structure and increase our effective tax rate. However, following the merger, the income of Ferguson will be subject to U.S. federal income tax as well as income tax in other jurisdictions. Currently applicable income tax laws, regulations, treaties and judicial and administrative interpretations of these laws, regulations and treaties in the U.S. and other jurisdictions may cause Ferguson’s effective tax rate to fluctuate significantly beyond our current projections. See “Risk Factors—Risks Related to the Merger—Ferguson’s effective tax rate may increase in the future, including as a result of the Merger” above for more information.

Accompanying Documents

In accordance with Article 127F of the Jersey Companies Law and SEC rules, as applicable, this proxy statement/prospectus is accompanied by the following:

 

•

a copy of the Merger Agreement, attached hereto as Annex A;

 

•

a copy of the New TopCo Proposed Certificate of Incorporation, substantially in the form attached hereto as Annex B;

 

•

a copy of the New TopCo Proposed Bylaws, substantially in the form attached hereto as Annex C;

 

•

copies of the certificates signed under Article 127E(5) of the Jersey Companies Law, attached hereto as Annex D, certifying that each director of Ferguson plc and Merger Sub has made full inquiry into the affairs of Ferguson plc and each director reasonably believes that Ferguson plc is, and will remain until the Merger is completed, able to discharge its liabilities as they fall due; and

 

•

a copy of the certificate signed under Article 127E(6) of the Jersey Companies Law, attached hereto as Annex E, certifying that in the opinion of each director who will be a director of Ferguson plc (which will be renamed Ferguson (Jersey) Limited at the Effective Time) following the Merger, Ferguson (Jersey) Limited will be able to continue to carry on business and discharge its liabilities as they fall due: (a) on and immediately after the completion of the Merger; and (b) if later, until 12 months after the signing of this certificate.

Material Interests under Article 127F(2)(a)(v) of the Jersey Companies Law

Ferguson plc

Bill Brundage is a director of Merger Sub.

 

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Geoff Drabble, Alan Murray, Kelly Baker, Cathy Halligan, Brian May, Jim Metcalf, Tom Schmitt, Nadia Shouraboura, Suzanne Wood, Kevin Murphy and Bill Brundage are shareholders of Ferguson plc.

Each member of the Ferguson Board is a participant in one or more of Ferguson plc’s share plans, as described in “Executive and Director Compensation.”

Merger Sub

Bill Brundage is a director and a shareholder of Ferguson plc.

Bill Brundage is a participant in one or more of Ferguson plc’s share plans, as described in “Executive and Director Compensation.”

Resolution

The full text of the resolution to be passed in connection with the Merger Proposal is as follows:

“RESOLVED, that the merger agreement entered into by and among Ferguson Enterprises Inc., a newly incorporated corporation under the laws of Delaware, Ferguson (Jersey) 2 Limited, a newly formed Jersey incorporated private limited company and Ferguson plc (as it may be amended from time to time, the “Merger Agreement”) and that states, among other things, the terms and means of effecting a merger (the “Merger”) of Ferguson (Jersey) 2 Limited and Ferguson plc under Part 18B (Mergers) of the Companies (Jersey) Law 1991 (as amended, modified, or re-enacted from time to time, the “Jersey Companies Law”) be hereby approved for all purposes, including (without limitation) for the purposes of Article 127F(1) of the Jersey Companies Law and the directors of Ferguson plc (or a duly authorized committee thereof) be and are authorized to take all such action as they may consider necessary or desirable for the implementation of the Merger pursuant to the terms and subject to the conditions contained in the Merger Agreement.”

Vote Required for Approval

The Merger Proposal (and consequently, the transactions contemplated by the Merger Agreement) is proposed as a special resolution, which means that for this resolution to be passed at least two-thirds (66²⁄₃%) of the total number of votes cast on this resolution must be cast in favor of this resolution. Abstentions and broker non-votes are not considered votes cast and will not impact the outcome of the vote on this resolution.

The consummation of the Merger, on the terms of and subject to the conditions of the Merger Agreement, is conditioned upon the approval of the Merger Proposal.

Recommendation of the Ferguson Board

THE FERGUSON BOARD UNANIMOUSLY RECOMMENDS THAT FERGUSON SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE MERGER PROPOSAL.

 

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PROPOSAL NO. 2—THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSALS

If the Merger is consummated, the New TopCo Proposed Organizational Documents and the DGCL, will govern New TopCo and your rights as a stockholder of New TopCo instead of the Ferguson Governing Documents and the Jersey Companies Law. From and after the Effective Time, the Ferguson Governing Documents will be amended and restated by the deletion in their entirety and be substituted with the form of organizational documents attached to the Merger Agreement, which will reflect, among other things, the modified corporate structure wherein Ferguson will be a wholly owned subsidiary of New TopCo. Prior to the Effective Time, the organizational documents of New TopCo will be amended and restated by the deletion in their entirety and be substituted with the New TopCo Proposed Organizational Documents.

Ferguson Shareholders are asked, on an advisory basis, to consider and vote upon and to approve eight separate proposals with respect to certain differences between the Ferguson Governing Documents and the New TopCo Proposed Organizational Documents, which are being presented separately in accordance with SEC guidance to give Ferguson Shareholders the opportunity to present their views on important corporate governance provisions.

As an advisory vote, the outcome of the vote on any of the Advisory Organizational Documents Proposals is not binding upon Ferguson or the Ferguson Board. However, Ferguson values the opinions expressed by shareholders and will consider the outcome of the vote on the Advisory Organizational Documents Proposals when making future decisions relating to the corporate governance practices of New TopCo.

The New TopCo Proposed Organizational Documents have certain material differences compared to the existing Ferguson Governing Documents.

All Ferguson Shareholders are encouraged to read each of the New TopCo Proposed Organizational Documents in its entirety for a more complete description of its terms. Additionally, as the Ferguson Governing Documents are governed by the Jersey Companies Law and the New TopCo Proposed Organizational Documents will be governed by the DGCL, we encourage Ferguson Shareholders to carefully consult the information set out under the “Comparison of Corporate Governance and Shareholder Rights” section of this proxy statement/prospectus for a summary of the principal changes proposed between the Ferguson Governing Documents and the New TopCo Proposed Organizational Documents that are subject to the Advisory Organizational Documents Proposals. We also encourage Ferguson Shareholders to carefully consider the risk factors described in the “Risk Factors” section, including the “Risk Factors—Risks Related to New TopCo” section.

Advisory Organizational Documents Proposal 2.A

Overview

On an advisory basis, Ferguson Shareholders are being asked to authorize provisions in the New TopCo Proposed Certificate of Incorporation and New TopCo Proposed Bylaws under which (i) the New TopCo Proposed Certificate of Incorporation, once adopted, may be amended, altered or repealed in the manner prescribed by the DGCL and (ii) the New TopCo Proposed Bylaws, once adopted, may be amended, altered or repealed from time to time by the stockholders of New TopCo by the affirmative vote of holders of a majority of the voting power of the then outstanding shares of New TopCo entitled to vote thereon, and such additional vote as may be required by the New TopCo Proposed Certificate of Incorporation.

Reasons for the Proposal

The DGCL governs the procedures under which a Delaware corporation may amend its certificate of incorporation. Subject to certain exceptions, the DGCL generally requires any amendment of the certificate of incorporation to be approved by (a) the board of directors of the corporation and (ii) the holders of a majority of the then outstanding shares of capital stock of the corporation, unless the certificate of incorporation requires a higher vote. If the capital stock of a corporation is classified into different classes, certain amendments to the certificate of incorporation of a Delaware corporation also require a separate class vote. Furthermore, Delaware corporations are also permitted to amend their certificate of incorporation without a stockholder vote to change the name of the corporation and to effect certain types of forward stock splits and associated increases in the authorized number of shares.

The Ferguson Board believes these provisions, which generally provide a majority of the then outstanding shares of capital stock of New TopCo the power is necessary to amend the New TopCo Proposed Certificate of Incorporation, are in the best interests of Ferguson Shareholders who will become shareholders of New TopCo. The Ferguson Board similarly believes that the power to amend, alter or repeal the New TopCo Proposed Bylaws should be conferred on the holders of a majority of the voting power of the then outstanding shares of New TopCo entitled to vote thereon, subject to the rights of any holders of New TopCo Preferred Stock or any different classes of New TopCo capital stock that are then outstanding. We believe that the U.S. investor community and institutions generally view a majority vote as sufficient for any corporate action requiring stockholder approval.

 

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In addition, the Ferguson Board has noted that many public companies in the U.S. have transitioned away from including the supermajority voting requirements in their governing documents. After weighing these considerations, the Ferguson Board has determined that it is in the best interests of Ferguson Shareholders to include provisions in the New TopCo Proposed Certificate of Incorporation and New TopCo Proposed Bylaws under which (i) the New TopCo Proposed Certificate of Incorporation, once adopted, may be amended, altered or repealed in the manner prescribed by the DGCL and (ii) the New TopCo Proposed Bylaws, once adopted, may be amended, altered or repealed from time to time by the stockholders of New TopCo by the affirmative vote of holders of a majority of the voting power of the then outstanding shares of New TopCo entitled to vote thereon, and such additional vote as may be required by the New TopCo Proposed Certificate of Incorporation.

Vote Required for Approval

Advisory Organizational Documents Proposal 2.A is being proposed, on an advisory basis, as an ordinary resolution, which means that for this resolution to be passed more than half of the votes cast must be cast in favor of the resolution. Abstentions and broker non-votes are not considered votes cast and will not impact the outcome of the vote on this resolution. Although Ferguson is seeking a shareholder vote regarding Advisory Organizational Documents Proposal 2.A, a vote for such proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board and approval of such Proposal is not a condition to the closing of the Merger. Notwithstanding the approval of Advisory Organizational Documents Proposal 2.A, if the Merger is not consummated for any reason, the actions contemplated by Advisory Organizational Documents Proposal 2.A will not be effected.

Resolution

The full text of the resolution to be passed in connection with the Advisory Organizational Documents Proposal 2.A is as follows:

“RESOLVED, that, on an advisory basis, (i) the proposed amended and restated certificate of incorporation (as amended from time to time, the “New TopCo Proposed Certificate of Incorporation”) of Ferguson Enterprises Inc. (“New TopCo”), once adopted, may be amended, altered or repealed in the manner prescribed by the Delaware General Corporation Law, as in effect from time to time and (ii) the proposed amended and restated bylaws of New TopCo, once adopted, may be amended, altered or repealed from time to time by the stockholders of New TopCo by the affirmative vote of holders of a majority of the voting power of the then outstanding shares of New TopCo entitled to vote thereon, and such additional vote as may be required by the New TopCo Proposed Certificate of Incorporation.”

Recommendation of the Ferguson Board

THE FERGUSON BOARD UNANIMOUSLY RECOMMENDS THAT FERGUSON SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.A.

 

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Advisory Organizational Documents Proposal 2.B

Overview

On an advisory basis, Ferguson Shareholders are being asked to authorize provisions in the New TopCo Proposed Bylaws that provide that the New TopCo Proposed Bylaws, once adopted, may be amended, altered or repealed from time to time by the New TopCo Board without seeking any approval by the New TopCo stockholders, in accordance with the DGCL.

Reasons for the Proposal

The New TopCo Board is expected to consider a broad range of corporate governance issues and believes that the power to amend, alter and repeal provisions of the New TopCo Proposed Bylaws should be conferred on both the New TopCo Board and New TopCo stockholders.

The ability for the New TopCo Board to amend, alter or repeal provisions in the New TopCo Proposed Bylaws is considered an important aspect of good corporate governance as it would provide New TopCo the ability to respond to evolving corporate governance best practices in a timely manner. It is typical among public companies incorporated in the U.S. to confer upon the board of directors of a corporation the power to amend, alter or repeal provisions in the corporation’s bylaws without seeking its shareholders’ approval. The New TopCo Board is committed to maintaining high standards of corporate governance and keeping pace with ever-evolving corporate governance best practices. Granting the New TopCo Board the authority to amend the New TopCo Proposed Bylaws is in keeping with the corporate governance of its peers and facilitates responsiveness to a broad range of ever-evolving corporate governance issues in a timely manner.

Vote Required for Approval

Advisory Organizational Documents Proposal 2.B is being proposed, on an advisory basis, as an ordinary resolution, which means that for this resolution to be passed more than half of the votes cast must be cast in favor of the resolution. Abstentions and broker non-votes are not considered votes cast and will not impact the outcome of the vote on this resolution. Although Ferguson is seeking a shareholder vote regarding Advisory Organizational Documents Proposal 2.B, a vote for such proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board and approval of such Proposal is not a condition to the closing of the Merger. Notwithstanding the approval of Advisory Organizational Documents Proposal 2.B, if the Merger is not consummated for any reason, the actions contemplated by Advisory Organizational Documents Proposal 2.B will not be effected.

Resolution

The full text of the resolution to be passed in connection with the Advisory Organizational Documents Proposal 2.B is as follows:

“RESOLVED, that, on an advisory basis, the proposed amended and restated bylaws of Ferguson Enterprises Inc. (“New TopCo”), once adopted, may be amended, altered or repealed from time to time by the board of directors of New TopCo without seeking any approval by the New TopCo stockholders, in accordance with the Delaware General Corporation Law, as in effect from time to time.”

Recommendation of the Ferguson Board

THE FERGUSON BOARD UNANIMOUSLY RECOMMENDS THAT FERGUSON SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.B.

 

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Advisory Organizational Documents Proposal 2.C

Overview

On an advisory basis, Ferguson Shareholders are being asked to authorize provisions in the New TopCo Proposed Certificate of Incorporation and the New TopCo Proposed Bylaws that provide that newly created directorships resulting from any increase in the authorized number of directors and vacancies on the New TopCo Board resulting from the death, resignation, disqualification, removal of a director or any other cause will only be filled by the affirmative vote of a majority of the directors then in office or by a sole remaining director, even though less than a quorum of the New TopCo Board, and not by the stockholders. Any such newly appointed director will serve until the first annual meeting of the stockholders held after such director’s appointment for the purpose of electing directors and, unless the number of directors is reduced effective at such annual meeting of stockholders in accordance with the provisions of the New TopCo Proposed Organizational Documents, until such director’s successor will have been elected and qualified or until his or her earlier death, resignation, disqualification or removal.

Reasons for the Proposal

The DGCL permits a Delaware corporation’s board of directors to fill any vacant positions on the board unless otherwise provided in the certificate of incorporation or bylaws of such corporation. The Ferguson Board believes that the New TopCo Board should be provided the flexibility to fill vacancies on the New TopCo Board without the requirement and expense of calling a special meeting of stockholders or otherwise needing to wait until the next annual meeting of stockholders. This flexibility will allow the New TopCo Board to promptly respond to any vacancies on the New TopCo Board and to fill such vacancies with qualified candidates, while avoiding having director seats remaining vacant until a stockholder meeting can be convened.

Vote Required for Approval

Advisory Organizational Documents Proposal 2.C is being proposed, on an advisory basis, as an ordinary resolution, which means that for this resolution to be passed more than half of the votes cast must be cast in favor of the resolution. Abstentions and broker non-votes are not considered votes cast and will not impact the outcome of the vote on this resolution. Although Ferguson is seeking a shareholder vote regarding Advisory Organizational Documents Proposal 2.C, a vote for such proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board and approval of such Proposal is not a condition to the closing of the Merger. Notwithstanding the approval of Advisory Organizational Documents Proposal 2.C, if the Merger is not consummated for any reason, the actions contemplated by Advisory Organizational Documents Proposal 2.C will not be effected.

Resolution

The full text of the resolution to be passed in connection with the Advisory Organizational Documents Proposal 2.C is as follows:

“RESOLVED, that, on an advisory basis, provisions in the proposed amended and restated bylaws of Ferguson Enterprises Inc. (“New TopCo”) and the proposed amended and restated certificate of incorporation of New TopCo that provide that all vacancies on the New TopCo board of directors be filled solely and exclusively by the affirmative vote of a majority of the remaining directors then in office, and not by the stockholders, be, and hereby are, authorized.”

Recommendation of the Ferguson Board

THE FERGUSON BOARD UNANIMOUSLY RECOMMENDS THAT FERGUSON SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.C.

 

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Advisory Organizational Documents Proposal 2.D

Overview

On an advisory basis, Ferguson Shareholders are being asked to authorize provisions in the New TopCo Proposed Bylaws relating to the right of New TopCo stockholders to request a special meeting of New TopCo stockholders. These provisions provide that special meetings of New TopCo stockholders will be called by the corporate secretary of New TopCo after receipt of one or more valid written demands to call a special meeting from stockholders of record that Own (as defined in the New TopCo Proposed Bylaws) in the aggregate at least 15% of the voting power (the “Requisite Percentage”) of the outstanding shares of New TopCo then entitled to vote on the matter to be brought before the proposed special meeting, in each case, subject to the requirements and limitations set forth in the New TopCo Proposed Bylaws (a “New TopCo Stockholder Requested Special Meeting”).

Reasons for the Proposal

The Ferguson Board believes that the Requisite Percentage will protect stockholder interests by ensuring that New TopCo Stockholder Requested Special Meetings are (i) of concern to a significant number of New TopCo Stockholders, (ii) worth the significant expense to New TopCo, and (iii) not an unnecessary distraction.

The Ferguson Board believes that the Requisite Percentage is reasonable, appropriate and aligned with Ferguson Shareholders’ interests as future New TopCo stockholders. The New TopCo Proposed Bylaws will provide New TopCo stockholders the ability to call New TopCo Stockholder Requested Special Meetings, while appropriately balancing against the risk that a small minority of stockholders, including those with narrow interests, may ineffectively use corporate resources to pursue an agenda not favored by a majority of New TopCo stockholders.

Holding a special stockholder meeting costs money and demands significant attention from the New TopCo Board and New TopCo’s senior management. In addition, it can create a disruption to New TopCo’s normal business operations. As such, the Ferguson Board believes that a special stockholder meeting should only be convened to discuss extraordinary events when fiduciary, strategic or similar considerations dictate the matter be addressed prior to the next annual meeting. The Requisite Percentage establishes the appropriate balance between meaningful accountability and mitigation of risk that may be presented by a lower threshold.

New TopCo stockholders’ ability to vote on significant matters is further ensured and protected by state law and other regulations. As a Delaware corporation, New TopCo is required to have all major corporate actions, such as mergers, a sale of all or substantially all of New TopCo’s assets or, except in a limited number of situations, increases or decreases in authorized shares, approved by stockholders. In addition, as a New York Stock Exchange listed company, New TopCo will also be required to, among other things, obtain stockholder approval for adoption, and certain amendments, of equity compensation plans, significant issuances of securities to related parties or when such issuances represent more than 20% of the New TopCo’s outstanding common stock or voting power.

Vote Required for Approval

Advisory Organizational Documents Proposal 2.D is being proposed, on an advisory basis, as an ordinary resolution, which means that for this resolution to be passed more than half of the votes cast must be cast in favor of the resolution. Abstentions and broker non-votes are not considered votes cast and will not impact the outcome of the vote on this resolution. Although Ferguson is seeking a shareholder vote regarding Advisory Organizational Documents Proposal 2.D, a vote for such proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board and approval of such Proposal is not a condition to the closing of the Merger. Notwithstanding the approval of Advisory Organizational Documents Proposal 2.D, if the Merger is not consummated for any reason, the actions contemplated by Advisory Organizational Documents Proposal 2.D will not be effected.

Resolution

The full text of the resolution to be passed in connection with the Advisory Organizational Documents Proposal 2.D is as follows:

“RESOLVED, that, on an advisory basis, provisions in the proposed amended and restated bylaws of Ferguson Enterprises Inc. (“New TopCo”) relating to the right of New TopCo stockholders to request a special meeting of New TopCo stockholders be, and are hereby, authorized.”

 

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Recommendation of the Ferguson Board

THE FERGUSON BOARD UNANIMOUSLY RECOMMENDS THAT FERGUSON SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.D.

 

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Advisory Organizational Documents Proposal 2.E

Overview

On an advisory basis, Ferguson Shareholders are being asked to authorize provisions in the New TopCo Proposed Certificate of Incorporation limiting personal liability of New TopCo directors and certain officers for monetary damages for breach of fiduciary duty as a director or as an officer to the fullest extent permitted under the DGCL.

Reasons for the Proposal

The Ferguson Board believes that eliminating personal monetary liability for directors and certain officers under certain circumstances is reasonable and appropriate because the nature of the role of directors and officers often requires them to make decisions on crucial matters in time-sensitive situations, which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of merit. Limiting concern about personal risk would empower both directors and officers to best exercise their business judgment in furtherance of stockholder interests. The Ferguson Board also anticipates that similar exculpation provisions are likely to be adopted by Ferguson’s peers and others with whom Ferguson competes for executive talent. As a result, director and officer exculpation provisions may become necessary for Delaware corporations to attract and retain experienced and qualified corporate directors and officers. Further, Delaware corporations that fail to adopt director and officer exculpation provisions may experience a disproportionate amount of nuisance litigation and disproportionately increased costs in the form of increased director and officer liability insurance premiums, as well as diversion of management attention from the business of the corporation.

The limitation of liability and indemnification provisions in the New TopCo Proposed Certificate of Incorporation and the New TopCo Proposed Bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty of care. These provisions also may have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit New TopCo and its stockholders. In addition, your investment may be adversely affected to the extent New TopCo pays the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

Vote Required for Approval

Advisory Organizational Documents Proposal 2.E is being proposed, on an advisory basis, as an ordinary resolution, which means that for this resolution to be passed more than half of the votes cast must be cast in favor of the resolution. Abstentions and broker non-votes are not considered votes cast and will not impact the outcome of the vote on this resolution. Although Ferguson is seeking a shareholder vote regarding Advisory Organizational Documents Proposal 2.E, a vote for such proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board, and approval of such Proposal is not a condition to the closing of the Merger. Notwithstanding the approval of Advisory Organizational Documents Proposal 2.E, if the Merger is not consummated for any reason, the actions contemplated by Advisory Organizational Documents Proposal 2.E will not be effected.

Resolution

The full text of the resolution to be passed in connection with the Advisory Organizational Documents Proposal 2.E is as follows:

“RESOLVED, that, on an advisory basis, the provisions in the proposed amended and restated certificate of incorporation of Ferguson Enterprises Inc. (“New TopCo”) limiting personal liability of New TopCo directors and certain officers for monetary damages for breach of fiduciary duty as a director or as an officer to the fullest extent permitted under the Delaware General Corporation Law, as in effect from time to time be, and are hereby, authorized.”

Recommendation of the Ferguson Board

THE FERGUSON BOARD UNANIMOUSLY RECOMMENDS THAT FERGUSON SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.E.

 

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Advisory Organizational Documents Proposal 2.F

Overview

On an advisory basis, Ferguson Shareholders are being asked to authorize exclusive forum provisions in the New TopCo Proposed Certificate of Incorporation that provide that, unless New TopCo consents in writing to the selection of an alternative forum, the Court of Chancery (or, if and only if the Court of Chancery lacks subject matter jurisdiction, any state court located within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of New TopCo, (ii) any action asserting a claim of breach of a duty (including any fiduciary duty) by, or other wrongdoing by, any current or former director, officer, employee, agent or stockholder of New TopCo to New TopCo or New TopCo’s stockholders, (iii) any action asserting a claim against New TopCo or any current or former director, officer, employee, agent or stockholder of New TopCo arising out of or relating to any provision of the DGCL, the New TopCo Proposed Certificate of Incorporation or the New TopCo Proposed Bylaws, (iv) any action to interpret, apply, enforce or determine the validity of the New TopCo Proposed Certificate of Incorporation or the New TopCo Proposed Bylaws, (v) any action asserting a claim against New TopCo or any current or former director, officer, employee, agent or stockholder of New TopCo governed by the internal affairs doctrine, (vi) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL or (vii) any action as to which the DGCL confers jurisdiction on the Court of Chancery. This exclusive forum provision may not apply to suits brought to enforce a duty or liability vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, such as those created by the U.S. Securities Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. In addition, the New TopCo Proposed Certificate of Incorporation provides that unless New TopCo consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the U.S. will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action under the U.S. Securities Act against New TopCo or any director, officer, employee, or agent of New TopCo.

Reasons for the Proposal

The Ferguson Articles currently provide that the Courts of Jersey will be the exclusive forum for certain specified shareholder litigation and that the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the U.S. Securities Act.

The Ferguson Board believes that, given that New TopCo is incorporated in Delaware, the Delaware courts are best suited to address certain specified claims that be made by a New TopCo stockholder, rather than the Royal Court, and that, consistent with the Ferguson Articles, the federal exclusive forum provision for claims under the U.S. Securities Act is in the best interests of Ferguson Shareholders. Accordingly, the effective result of this proposal is to replace Jersey with Delaware, in line with New TopCo’s domicile.

Delaware law generally applies to such matters and the Delaware courts have a reputation for expertise in corporate law matters. Delaware offers a specialized Court of Chancery to address corporate law matters, with streamlined procedures and processes, which help provide relatively quick decisions. This accelerated schedule can minimize the time, cost and uncertainty of litigation for all parties. The Court of Chancery has developed considerable expertise with respect to corporate law issues, as well as a substantial and influential body of case law construing Delaware’s corporate law and long-standing precedent regarding corporate governance. This provides stockholders and New TopCo with more predictability regarding the outcome of intra-corporate disputes. In the event that the Court of Chancery does not have jurisdiction, the other state and federal courts located in Delaware would be the most appropriate forums because these courts have more expertise on matters of Delaware law as compared to other jurisdictions.

Adopting Delaware as the exclusive forum for certain stockholder litigation is intended to assist New TopCo in avoiding multiple lawsuits in multiple jurisdictions regarding the same matter. The ability to require such claims to be brought in a single forum will help to assure consistent consideration of the issues, the application of a relatively known body of case law and level of expertise and should promote efficiency in the resolution of such claims. In addition, an exclusive forum provision for certain stockholder litigation would allow New TopCo’s management to focus on the underlying substantive rights or remedies, instead of addressing where a claim may be brought, all of which should also reduce the cost to New TopCo of resolving such matters.

The Ferguson Board further believes that providing that, unless we consent in writing to an alternative forum, the federal district courts of the U.S. will be the sole and exclusive forum for resolving actions arising under the U.S. Securities Act against New TopCo or any director, officer, employee, or agent of New TopCo, provides the flexibility to file such suits in any federal district court while providing the benefits of eliminating duplicative litigation and having such cases heard by courts that are well-

 

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versed in the applicable law. This exclusive forum provision also may not apply to suits brought to enforce a duty or liability vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, such as those created by the U.S. Securities Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

In addition, this proposal would promote judicial fairness and avoid conflicting results, as well as make New TopCo’s defense of applicable claims less disruptive and more economically feasible, principally by avoiding duplicative discovery. However, these exclusive forum provisions may limit the ability of New TopCo stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with New TopCo or New TopCo’s directors, officers, employees, agents or stockholders, which may discourage such lawsuits against New TopCo or New TopCo’s directors, officers, employees, agents or stockholders.

Vote Required for Approval

Advisory Organizational Documents Proposal 2.F is being proposed, on an advisory basis, as an ordinary resolution, which means that for this resolution to be passed more than half of the votes cast must be cast in favor of the resolution. Abstentions and broker non-votes are not considered votes cast and will not impact the outcome of the vote on this resolution. Although Ferguson is seeking a shareholder vote regarding Advisory Organizational Documents Proposal 2.F, a vote for such proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board, and approval of such Proposal is not a condition to the closing of the Merger. Notwithstanding the approval of Advisory Organizational Documents Proposal 2.F, if the Merger is not consummated for any reason, the actions contemplated by Advisory Organizational Documents Proposal 2.F will not be effected.

Resolution

The full text of the resolution to be passed in connection with the Advisory Organizational Documents Proposal 2.F is as follows:

“RESOLVED, that, on an advisory basis, the exclusive forum provisions in the proposed amended and restated certificate of incorporation of Ferguson Enterprises Inc. be, and are hereby, authorized.”

Recommendation of the Ferguson Board

THE FERGUSON BOARD UNANIMOUSLY RECOMMENDS THAT FERGUSON SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.F.

 

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Advisory Organizational Documents Proposal 2.G

Overview

On an advisory basis, Ferguson Shareholders are being asked to authorize the New TopCo Board to issue up to 100,000 shares of New TopCo Preferred Stock in one or more series, with such terms and conditions and at such future dates as may be expressly determined by the New TopCo Board and as may be permitted by the DGCL.

Following the Merger, New TopCo will be authorized to issue 500,000,000 shares of capital stock, divided into 499,900,000 shares of New TopCo Common Stock and 100,000 shares of New TopCo Preferred Stock. The New TopCo Board has authorized provisions of the New TopCo Proposed Certificate of Incorporation to allow for the issuance of any or all of the authorized shares of New TopCo Preferred Stock from time to time at the discretion of the New TopCo Board, as may be permitted by the DGCL, and without further stockholder action. The shares of New TopCo Preferred Stock would be issuable for any proper corporate purpose, including, among other things, future acquisitions, capital raising transactions consisting of equity or convertible debt, stock dividends or issuances under current and any future stock incentive plans, pursuant to which we may provide equity incentives to associates, non-employee directors and consultants.

Reasons for the Proposal

Under the DGCL, the certificate of incorporation of a corporation may expressly authorize the board of directors to create one or more series of preferred stock with voting, conversion, dividend distribution and other rights to be determined by the board of directors at the time of issuance. We believe that having the ability to create additional shares of New TopCo Preferred Stock will provide the New TopCo Board and New TopCo with the flexibility to issue shares under circumstances we believe to be favorable without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance. The flexibility to issue such New TopCo Preferred Stock in the future may benefit New TopCo by providing it with new opportunities for financing its business, for acquiring other businesses, for forming strategic partnerships and alliances and for stock dividends and stock splits, among others. New TopCo currently has no such plans, proposals, or arrangements, written or otherwise anticipated to issue any of the additional authorized stock for such purposes. We also have no present intention to use this power for an anti-takeover defense, such as adopting a stockholder rights plan or poison pill.

Vote Required for Approval

Advisory Organizational Documents Proposal 2.G is being proposed, on an advisory basis, as an ordinary resolution, which means that for this resolution to be passed more than half of the votes cast must be cast in favor of the resolution. Abstentions and broker non-votes are not considered votes cast and will not impact the outcome of the vote on this resolution. Although Ferguson is seeking a shareholder vote regarding Advisory Organizational Documents Proposal 2.G, a vote for such proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board and approval of such Proposal is not a condition to the closing of the Merger. Notwithstanding the approval of Advisory Organizational Documents Proposal 2.G, if the Merger is not consummated for any reason, the actions contemplated by Advisory Organizational Documents Proposal 2.G will not be effected.

Resolution

The full text of the resolution to be passed in connection with the Advisory Organizational Documents Proposal 2.G is as follows:

“RESOLVED, that, on an advisory basis, the board of directors (the “New TopCo Board”) of Ferguson Enterprises Inc. (“New TopCo”) be, and is hereby, authorized to issue up to 100,000 shares of preferred stock of New TopCo, par value $0.0001 per share, in one or more series, with such terms and conditions and at such future dates as may be expressly determined by the New TopCo Board and as may be permitted by the Delaware General Corporation Law, as in effect from time to time.”

Recommendation of the Ferguson Board

THE FERGUSON BOARD UNANIMOUSLY RECOMMENDS THAT FERGUSON SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.G.

 

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Advisory Organizational Documents Proposal 2.H

Overview

On an advisory basis, Ferguson Shareholders are being asked to authorize the New TopCo Board to issue new shares of New TopCo Common Stock in the future without offering pre-emptive rights.

Reasons for the Proposal

The DGCL provides that no stockholder of a Delaware corporation has a pre-emptive right to subscribe to an additional issuance of stock or any securities convertible into stock unless and to the extent that such right is expressly granted to such stockholder in the corporation’s certificate of incorporation. Pre-emptive rights are uncommon for U.S. companies, and the provision of pre-emptive rights may limit New TopCo’s flexibility to finance business opportunities compared to Ferguson’s peer companies. By granting pre-emptive rights, New TopCo may have to offer new shares at a lower price or with more favorable terms to attract new investment. The New TopCo Board has no present intention to issue additional shares of New TopCo Common Stock for capital raising purposes.

Vote Required for Approval

Advisory Organizational Documents Proposal 2.H is being proposed, on an advisory basis, as an ordinary resolution, which means that for this resolution to be passed more than half of the votes cast must be cast in favor of the resolution. Abstentions and broker non-votes are not considered votes cast and will not impact the outcome of the vote on this resolution. Although Ferguson is seeking a shareholder vote regarding Advisory Organizational Documents Proposal 2.H, a vote for such proposal is an advisory vote only, is not binding on Ferguson or the Ferguson Board and approval of such Proposal is not a condition to the closing of the Merger. Notwithstanding the approval of Advisory Organizational Documents Proposal 2.H, if the Merger is not consummated for any reason, the actions contemplated by Advisory Organizational Documents Proposal 2.H will not be effected.

Resolution

The full text of the resolution to be passed in connection with the Advisory Organizational Documents Proposal 2.H is as follows:

“RESOLVED, that, on an advisory basis, the board of directors of Ferguson Enterprises Inc. (“New TopCo”) be, and is hereby, authorized to issue new shares of common stock, par value $0.0001 per share, of New TopCo in the future without offering pre-emptive rights.”

Recommendation of the Ferguson Board

THE FERGUSON BOARD UNANIMOUSLY RECOMMENDS THAT FERGUSON SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE ADVISORY ORGANIZATIONAL DOCUMENTS PROPOSAL 2.H.

 

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INFORMATION ABOUT NEW TOPCO

Information, Name and Offices

Ferguson Enterprises Inc., which we refer to as New TopCo, is a Delaware corporation that was formed on February 5, 2024. New TopCo is governed by the DGCL as well as by its certificate of incorporation and bylaws. The registered and principal office of New TopCo is 1521 Concord Pike, Suite 201, Wilmington, County of New Castle, DE 19803.

Intercorporate Relationships

Assuming the Merger Proposal is approved at the Ferguson Special Meeting, following the Effective Time and completion of the Merger, the stockholders of New TopCo will be the same persons who were Ferguson Shareholders immediately prior to the Merger and New TopCo will become the direct or indirect owner of all of the assets and liabilities of Ferguson plc. As a result, there will be no effective change of control of Ferguson plc as a result of the Merger since ultimate control will remain with the Ferguson Shareholders. The charts below depict the general structure of Ferguson plc and its subsidiaries immediately prior to the Merger, with the arrow depicting the Merger, and the structure of New TopCo and its subsidiaries after the Merger.

 

 

Business

New TopCo was formed for the purpose of effecting the Merger. Prior to the Merger, New TopCo will have no property, assets, liabilities or operations, other than those incident to its formation and the preparation and filing of the registration statement on Form S-4 to which this proxy statement/prospectus forms a part and a U.K. prospectus with respect to the New TopCo Common Stock. New TopCo is not currently subject to any legal proceedings. Following completion of the Merger, New TopCo and its subsidiaries will carry on the business currently carried on by Ferguson and its subsidiaries. See the section entitled “Information About Ferguson” for more information about Ferguson’s business.

New TopCo Common Stock

For a description of the New TopCo Common Stock see “Description of Capital Stock of New TopCo After the Merger.”

Directors and Officers of New TopCo

The persons who currently serve as the directors and executive officers of Ferguson plc (other than Ms. Sammie Long, who will retire from her position at Ferguson, effective July 31, 2024) are expected to serve as the directors and executive officers of New TopCo following the Merger, subject to the appointment, death, resignation or removal of any directors or executive officers on or prior to the Effective Time. See “Management of New TopCo” for additional information.

Director and Executive Compensation

Following the Merger, we expect that New TopCo’s director and executive compensation programs will be substantially similar to those currently offered by Ferguson plc. See the section entitled “Executive and Director Compensation” for more information.

Beneficial Ownership of Securities of New TopCo

As of February 15, 2024 there were 3 stockholders of New TopCo, Kevin Murphy, Bill Brundage and Ian Graham, who each own one share, or 33¹/₃% of outstanding shares of New TopCo Common Stock. On the terms of and subject to the conditions of

 

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the Merger Agreement, at the Effective Time, New TopCo will be the sole shareholder of Ferguson plc (which will be renamed Ferguson (Jersey) Limited at the Effective Time) and each existing share of New TopCo Common Stock issued and outstanding immediately prior to the Effective Time will be cancelled. In addition and simultaneously, (i) each Ferguson Share that is issued and outstanding at the Merger Record Time will automatically be cancelled without any repayment of capital and New TopCo will issue as consideration therefor new, duly authorized, validly issued, fully paid and non-assessable shares of New TopCo Common Stock to each Ferguson Shareholder on a one-for-one basis for each Ferguson Share held by such Ferguson Shareholder immediately preceding the Merger Record Time and (ii) each U.K. DI representing an issued and outstanding Ferguson Share at the Merger Record Time will be cancelled and a New TopCo U.K. DI representing one share of New TopCo Common Stock will be issued through CREST by the Depositary as consideration therefor to each holder of U.K. DIs on a one-for-one basis for each U.K. DI held by such holder immediately preceding the Merger Record Time. See “Security Ownership of Certain Beneficial Owners and Management” for more information regarding beneficial ownership of Ferguson Shares and New TopCo Common Stock.

Auditor and Transfer Agent

The auditor of New TopCo following completion of the Merger will be Deloitte & Touche LLP. The transfer agent for New TopCo Common Stock following completion of the Merger will be Computershare. The transfer agent’s address is 150 Royall Street, Canton, MA 02021.

Corporate Governance of New TopCo

The completion of the Merger will change the governing corporate law that applies to shareholders of our parent company from Jersey law to Delaware law. The legal system governing corporations organized under Delaware law differs from the legal system governing corporations organized under Jersey law. As a result, the New TopCo Proposed Organizational Documents are not identical, or even substantially similar, to the Ferguson Governing Documents. We believe that these changes (i) either are required by Delaware law or otherwise result from differences between the corporate laws of Jersey and the corporate laws of Delaware, (ii) relate to the change of the place of incorporation of the publicly traded corporate parent of Ferguson from Jersey to Delaware or (iii) align with best practices among Delaware S&P 500 companies. All Ferguson Shareholders are encouraged to read each of the New TopCo Proposed Certificate of Incorporation and the New TopCo Proposed Bylaws, substantially in the form attached hereto as Annex B and Annex C, respectively. We summarize the material differences between the Ferguson Governing Documents and the New TopCo Proposed Organizational Documents, and the changes in your rights as a shareholder resulting from the Merger, under “Comparison of Corporate Governance and Shareholder Rights.” See also the section entitled “Description of Capital Stock of New TopCo After the Merger” for more information.

Ferguson Equity Plans

In connection with the Merger, New TopCo will assume or, as applicable, substitute with substantially similar entitlements, all compensation or benefit plans, policies and arrangements previously maintained by Ferguson plc. With respect to Ferguson plc’s equity incentive plans, New TopCo will assume the Assumed Ferguson Employee Share Plans and all outstanding incentive awards issued thereunder. Each outstanding Ferguson plc incentive award previously granted under the Assumed Ferguson Employee Share Plans will be converted to an equivalent New TopCo incentive award. The incentive awards granted by New TopCo as a result of such conversion will be subject to substantially the same terms and conditions as the previously held Ferguson plc incentive awards, except, in the case of equity-based Ferguson plc incentive awards, the security issuable upon exercise or settlement of the relevant New TopCo incentive award, as applicable, will be New TopCo Common Stock (or its cash equivalent) rather than Ferguson Shares (or their cash equivalent).

Financial Information

We have included no data for New TopCo because New TopCo only has nominal assets, no liabilities and has not engaged in any business or activities other than in connection with the Merger. The consolidated financial statements of New TopCo immediately following the Merger will be the same as the consolidated financial statements of Ferguson immediately prior to the Merger. See the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements included in this proxy statement/prospectus for more information.

Reports to Securityholders and Available Information

Ferguson plc is subject to the informational requirements of the U.S. Securities Exchange Act. In accordance with these requirements, Ferguson plc files reports and other information with the SEC. Following the Merger, New TopCo will become

 

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subject to the informational requirements of the U.S. Securities Exchange Act. The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. Ferguson plc’s website is corporate.ferguson.com. Ferguson plc’s reports filed or furnished pursuant to Section 13(a) or 15(d) of the U.S. Securities Exchange Act, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments thereto, are available, free of charge, through Ferguson plc’s website as soon as reasonably practicable after the material is electronically filed with or furnished to the SEC. Any references to Ferguson plc’s website contained herein do not constitute incorporation by reference of information contained on such website and such information should not be considered part of this proxy statement/prospectus. For more information on Ferguson plc’s filings with the SEC, including the important business and financial information about Ferguson plc that we have incorporated by reference in this proxy statement/prospectus, see the sections entitled “Incorporation of Certain Information By Reference” and “Where You Can Find More Information.”

 

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INFORMATION ABOUT FERGUSON

The business of Ferguson will be the primary business of New TopCo and its consolidated subsidiaries following the Merger.

Company Overview

Ferguson’s operations are based, through its subsidiaries, in North America. Ferguson is a leading value-added distributor in North America providing expertise, solutions and products from infrastructure, plumbing and appliances to HVAC, fire, fabrication and more. We exist to make our customers’ complex projects simple, successful and sustainable. We sell through a common network of distribution centers, branches, counter service and specialist sales associates, showroom consultants and e-commerce channels.

Ferguson has a long history and has maintained businesses throughout Europe, Canada and the U.S. in the 1900s. In the early 2000s, Ferguson’s focus shifted to attractive North American markets. As a result, the operating businesses across Europe were disposed of through various transactions, most recently in 2021. As part of this transition and following a corporate restructuring, Ferguson became the ultimate holding company for the business in 2019.

Ferguson was incorporated and registered in Jersey as Alpha JCo Limited on March 8, 2019, under the Jersey Companies Law, as a private limited company with company number 128484. Ferguson converted its status to a public limited company and changed its name, first to Ferguson Newco plc on March 26, 2019, and then to Ferguson plc on May 10, 2019. Ferguson’s jurisdiction of organization is Jersey and its corporate headquarters are currently located at 1020 Eskdale Road, Winnersh Triangle, Wokingham, Berkshire, RG41 5TS and its telephone number is +44 (0) 118 927 3800. Ferguson is also registered in the U.K. as Ferguson Group Holdings, U.K. Establishment No. BR021199. Ferguson’s management office in the U.S. is located at 751 Lakefront Commons, Newport News, VA 23606.

Ferguson is listed on the New York Stock Exchange and the London Stock Exchange under the symbol “FERG.”

Ferguson’s corporate website is corporate.ferguson.com. We include website addresses throughout this proxy statement/prospectus for reference only. The information contained in, or available through, these websites is not part of, or incorporated by reference into, this proxy statement/prospectus. Addresses, including electronic addresses provided in this proxy statement/prospectus, are provided solely for the purposes so specified. You may not use any electronic address provided in this proxy statement/prospectus to communicate with Ferguson for any purpose other than those expressly stated herein or therein.

Business Segments

Ferguson’s reportable segments are established based on how Ferguson manages its business and allocates resources, which is on a geographical basis. Ferguson’s reportable segments are the U.S. and Canada. For further segment information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Note 2, Revenue and segment information” of the Notes to the Consolidated Financial Statements included in this proxy statement/prospectus. Below is a description of Ferguson’s reportable segments.

U.S. Segment

The U.S. segment contributed 95%, 95% and 94% of net sales from continuing operations in fiscal 2023, 2022 and 2021, respectively.

The U.S. segment operates primarily under the Ferguson brand and provides expertise, solutions, and products, from infrastructure, plumbing and appliances to HVAC, fire, fabrication and more, to residential and non-residential customers. Its products are delivered through a common network of distribution centers, branches, counter service and specialist sales associates, showroom consultants and e-commerce channels. As of July 31, 2023, the U.S. business operated 1,549 branches and 10 national distribution centers serving all 50 states with approximately 32,000 associates. These locations provide same-day and next-day product availability, which we believe to be a competitive advantage and an important requirement for customers. In addition, our U.S. business operates three market distribution centers (“MDCs”) in Denver, Colorado, Houston, Texas and Phoenix, Arizona for branch replenishment and final mile distribution to customers.

Canada Segment

The Canada segment contributed 5%, 5% and 6% of net sales from continuing operations in fiscal 2023, 2022 and 2021, respectively.

 

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The Canada segment operates primarily under the Wolseley brand and supplies plumbing, HVAC and refrigeration products to residential and commercial contractors. The Canada segment also supplies specialist water and wastewater treatment products to residential, commercial and infrastructure contractors, and supplies pipe, valves and fittings (“PVF”) solutions to industrial customers. As of July 31, 2023, the Canada business operated 213 branches with one national distribution center and approximately 3,000 associates.

Business Model

We have a balanced approach to attractive end markets and serve customers principally in North America. For fiscal 2023, approximately 52% of our net sales are to residential markets and 48% to non-residential markets with net sales within the residential and non-residential markets balanced between RMI (approximately 60% of our net sales) and new construction (approximately 40% of our net sales), based on management’s estimates.

Ferguson operates in highly fragmented markets, with no one market dominated by any single distributor. We are positioned as one of the top distributors in most end markets we serve, including residential, commercial, civil/infrastructure and industrial.

Our business bridges the gap between a large and fragmented supplier base with an even larger and more fragmented customer base. As of July 31, 2023, we had approximately 36,000 suppliers, with no supplier accounting for more than 5% of total inventory purchases, which provides us access to a diverse and broad range of quality products. We serve our customers through a network of 11 national distribution centers, three MDCs, 5,700 fleet vehicles, 1,762 branches and approximately 35,000 associates, in each case, as of July 31, 2023.

Customers

We exist to make our customers’ complex projects simple, successful and sustainable. We offer expertise and a broad range of products delivered where and when our customers need them. Customers rely on us to help them deliver critical infrastructure spanning almost every stage of projects within the residential and non-residential markets. We partner with our customers to keep millions of homes and businesses operating while helping them to run their business more efficiently. No single customer accounted for more than 1% of our net sales in fiscal 2023.

Value-Added Products and Solutions

Our value-added solutions include a variety of sales channels available to our customers ranging from inside and outside sales teams, sales centers, digital commerce capabilities, system-to-system capabilities, counter sales and showrooms. We also offer customized solutions such as virtual design, fabrication, valve actuation, pre-assembly, kitting, installation and project management services. With our value-added solutions, we aim to increase productivity for our customers and for the industry.

We source, distribute and sell products from domestic and international suppliers. Our products include branded products and own brand products that Ferguson sells exclusively in the market. As of July 31, 2023, we had approximately 36,000 suppliers. Over 95% of the products sold in the U.S. are sourced from U.S.-based suppliers, while approximately 90% of the products sold in Canada are sourced from Canada-based suppliers.

Our branded and own brand products are generally available from several sources and are not typically subject to supply constraints in normal market conditions. In the U.S., approximately 14% of net sales in fiscal 2023 are derived from basic products containing significant amounts of commodity-priced materials, predominantly plastic, copper and steel, and other components which can be subject to volatile price changes based upon fluctuations in the commodities market. To a lesser extent, fluctuations in the price of fuel could affect transportation costs. In general, increases in such prices increase our operating costs and negatively impact our operating profit to the extent that such increases cannot be passed on to customers. Conversely, if competitive pressures allow us to hold prices despite relevant raw material prices falling, profitability can increase.

Fulfillment options for our customers include delivery, customer pick-up from our branches, counters and locker locations, and direct shipments.

We also offer after-sales support that comprises warranty, credit, project-based billing, returns and maintenance, repair and operations (“MRO”) support.

Global Supply Chain

We have a global supply chain which provides access to approximately 36,000 suppliers and we sold more than 1 million unique products annually as of July 31, 2023. We operate an extensive network across North America, including two import

 

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centers, 11 national distribution centers and 1,762 branch locations, as of July 31, 2023. Our network also included, as of July 31, 2023, three MDCs which provide greater access to key strategic markets and allows us to bring our products closer to our customers. These MDCs include automated picking and replenishment systems for the majority of items picked. This automation improves efficiency and reduces manual handling of certain products which supports associate health and safety.

Competitive Conditions

We believe we are well-equipped to win new customers and generate attractive returns. We have leading positions in our residential and non-residential markets based on net sales as a percentage of overall market size. For fiscal 2023, approximately 52% and 48% of our net sales were derived from residential and non-residential end markets, respectively, and approximately 60% and 40% of our net sales were derived from the RMI and new construction sectors, respectively, based on management’s estimates. We have chosen to operate in each of these markets because we believe we can generate strong growth, solid gross and net margins and good returns on capital.

The markets we serve are highly fragmented with very few large competitors and a high number of small, local distributors, as well as mid-size regional distributors. While our market positions can be expanded through growth of our existing business, acquisitions also remain a core part of our growth strategy and we expect to focus on acquisitions that bolt-on to our existing branch network as well as acquisitions that provide further capabilities to serve our customers. We believe there is a significant opportunity for strong growth and continued consolidation within our markets.

Many customer projects require a range of products and solutions, and we leverage our scale and expertise across the organization for the benefit of our customers. Specifically, we believe our network of suppliers, associates and the number of branches and distribution centers provides us with the scale and expertise to serve our customers better than our competitors do, as many of these competitors operate only locally. In addition, we also benefit from significant synergies to help lower operating costs and improve margins. We believe these factors enable continued growth in net sales as well as growth in cash flow and, therefore, may better enable us to provide investment returns to shareholders.

Our scale and expertise position us to be involved in all stages of our customers’ projects, including design, staging, and project management. Across all our customers, we take a consultative approach. We partner with our customers in an effort to guide complex projects to a successful conclusion, and to make the entire project better because Ferguson was involved.

Contractual Relationships and Seasonality

We are not dependent on any material licenses or contracts. Our business is not highly seasonal although we generally experience the highest volume of sales in our fourth fiscal quarter which begins during the spring season in North America.

Intellectual Property

We rely on a combination of intellectual property laws, confidentiality procedures and contractual provisions to protect our proprietary assets and our brands. We have registered or applied for registration of trademarks, service marks, and internet domain names, both domestically and internationally.

Regulatory Landscape

Our operations are affected by various statutes, regulations and standards in the countries and markets in which we operate, including the U.S. and Canada. The amount of such regulation and the penalties for any breaches can vary. While we are not engaged in a highly regulated industry, we are subject to the laws governing businesses generally, including laws relating to competition, product safety, data protection, labor and employment practices, accounting and tax standards, international trade, fraud, bribery and corruption, land usage, the environment, health and safety, transportation, payment terms and other matters. We do not currently expect compliance with these laws and regulations to have a material effect on our capital expenditures, results of operations, or competitive position as compared to prior periods.

Human Capital Management

Our associates are fundamental to our long-term success. We continue to invest in the development of our associates and are committed to attracting, developing, engaging and retaining the best talent.

 

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Our people

As of July 31, 2023, Ferguson employed approximately 35,000 associates, of which approximately 32,000 were in the U.S., 3,000 were in Canada and a small number of associates were in certain other jurisdictions, including Asia, Switzerland, and the U.K.

The goal of our human capital management program is to attract diverse associates, develop associates to reach their full potential, and engage and retain the best talent – all contributing towards creating and maintaining a culture of inclusion where all associates can bring their true authentic selves to work every day.

Attracting diverse associates

Our hiring process is intended to reach a diverse talent pool to assist us in fostering a culture of innovation and acceptance through differences in thought, experience and perspective. We believe that the range of perspectives and experiences fostered by an inclusive and diverse organization gives us a competitive advantage, especially when it is shaped by a workforce that reflects the communities we serve.

Talent development

We place great emphasis on our associates’ development and provide opportunities to help them reach their full potential. Evidence of these opportunities can be seen in the career paths of our tenured leadership team. Through internal mobility, many of our leaders shifted from frontline roles to managerial roles. We offer a variety of leadership and development programs that develop skills and capabilities for our associates and leaders. These programs are tailored to associates’ leadership level and potential. We also offer associates professional development courses, many of which are on-demand and targeted at improving technical skills, sales, communication, well-being, critical thinking and relationship management skills. A mix of internal opportunities and external hires, blended with new talent through acquisitions, allows us to broaden the experience, knowledge and diversity of our leadership teams and overall workforce.

Associate engagement and retention

We champion engagement initiatives to further a culture where associates feel welcomed and valued. Our Business Resource Groups (“BRGs”) provide associates with opportunities to network with other associates and leaders, share common experiences, build allyship and strengthen Ferguson’s culture of inclusion and belonging within our organization. We currently maintain five BRGs supporting our Black, Women, LGBTQ+, Veteran and Hispanic/Latin American associates. Membership in our BRGs is open to all our associates. Each BRG is led by an executive sponsor, a chair and a leadership team who are voted into their roles by their respective BRG members.

We are committed to supporting our associates as well as customers and people within our communities. Through a variety of outreach efforts, we provide our associates with the opportunity to directly engage in community service and contribute to Ferguson being a good corporate citizen.

We offer these development and engagement programs to aid in the growth, engagement and retention of our associates. We believe that these programs, as well as our strategic focus on I&D, support our objective to retain the best talent.

Culture and values

We strive to maintain a culture of integrity and are committed to acting ethically in all our business activities. Our core values provide guidance on ethical situations where there may be uncertainty over how to proceed and set out the standards that we expect of our associates and those who may work on our behalf. Our Code of Business Conduct and Ethics (the “Code of Conduct”) is a resource dedicated to helping our associates live by our values and understand Ferguson’s commitment to compliance with all applicable laws and regulations, our Code of Conduct and Company policies. We require all associates, including new associates, to complete our Code of Conduct training on an annual basis.

Compensation and rewards

To help attract and retain the best talent available in the market, we offer our associates competitive rewards packages. We regularly review the structure of our incentive programs for alignment with our talent attraction and retention policy, our purpose and values, and our goal to incentivize associates to take ownership of their performance. We are committed to rewarding our

 

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associates based on the delivery of business objectives, as well as outstanding individual performance. We offer a wide variety of health, welfare, and financial benefits to our full-time and part-time associates, including health care and insurance benefits, mental health and well-being resources, retirement plans and an employee share purchase plan, among others.

We currently have several established recognition programs, where our top performing sales associates and managers receive recognition. The purpose of these programs is to demonstrate our appreciation for our associates and to recognize the exceptional performance and outstanding contributions they make to help support profitable growth in our business.

Health and safety

We strive to drive continuous improvement in our health and safety performance by maintaining high standards for our health and safety compliance programs and enforcing expected safe behaviors and global safety rules. We promote a culture of “first in safety,” which is supported by a commitment from our executive leadership and through engagement with our associates. We endeavor to ensure that at each location, our associates are well-informed about health and safety measures and are provided with the appropriate equipment and tools to protect themselves and those around them. Our safety efforts are further supported by the allocation of additional resources for safety improvements and the employment of dedicated safety professionals. Through continuous investment in health and safety, we strive to mitigate the risk of on-the-job injuries.

ESG Report

Additional information regarding our activities related to ESG matters, including our people and human capital strategy, can be found in our most recent ESG Report, which is available on our website. The contents of this report are not incorporated by reference into this proxy statement/prospectus or in any other report or document we file with the SEC.

Properties

We maintain our principal executive offices at 1020 Eskdale Road, Winnersh Triangle, Wokingham, Berkshire, RG41 5TS, U.K., and our management office in the U.S. is located in Newport News, Virginia. We believe our facilities are maintained in good operating condition and sufficient to meet our present operating needs.

The following table presents our principal facilities as of July 31, 2023:

 

Location / Segment		Facility & Use		Total Locations				Owned Locations				Leased Locations				Square Feet
U.S.		National Distribution Centers			10				90	%			10	%			6,541,697
U.S.		Market Distribution Centers			3				67	%			33	%			1,603,988
U.S.		Branches			1,549				17	%			83	%			45,285,226
Canada		National Distribution Center			1				—				100	%			292,395
Canada		Branches			213				23	%			77	%			2,989,375

Legal Proceedings

Ferguson is from time to time a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. With respect to such lawsuits, claims and proceedings, Ferguson records reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Ferguson does not expect any of its pending legal proceedings to have a material adverse effect on its results of operations, financial position, or cash flows. Ferguson maintains liability insurance for certain risks that are subject to certain self-insurance limits.

Reports to Securityholders and Available Information

Ferguson is subject to the informational requirements of the U.S. Securities Exchange Act. In accordance with these requirements, Ferguson files reports and other information with the SEC. Following the Merger, New TopCo will become subject to the informational requirements of the U.S. Securities Exchange Act. The SEC maintains an internet site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. Ferguson’s website is corporate.ferguson.com. Ferguson’s reports filed or furnished pursuant to Section 13(a) or 15(d) of the U.S. Securities Exchange Act, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments thereto, are available, free of charge, through Ferguson’s website as soon as reasonably

 

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practicable after the material is electronically filed with or furnished to the SEC. Any references to Ferguson’s website contained herein do not constitute incorporation by reference of information contained on such website and such information should not be considered part of this proxy statement/prospectus. For more information on Ferguson’s filings with the SEC, including the important business and financial information about Ferguson that we have incorporated by reference in this proxy statement/prospectus, see the sections entitled “Incorporation of Certain Information By Reference” and “Where You Can Find More Information.”

 

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MANAGEMENT OF NEW TOPCO

The persons who currently serve as the directors and executive officers of Ferguson plc (other than Ms. Sammie Long, who will retire from her position at Ferguson, effective July 31, 2024) are expected to serve as the directors and executive officers of New TopCo following the Merger, subject to the appointment, death, resignation or removal of any directors or executive officers on or prior to the Effective Time.

Directors

The following table lists, as of March 1, 2024, the names of New TopCo’s eleven (11) directors, their respective ages, and positions with New TopCo, followed by a brief biography of each individual, including their business experience. Each of Ferguson’s directors were appointed to serve as directors of New TopCo on February 14, 2024, except as set forth below.

 

Name		Age				Title(1)
Geoff Drabble			64			Board Chair
Kelly Baker			54			Director
Bill Brundage(2)			47			Chief Financial Officer, Chief Accounting Officer & Treasurer and Director
Catherine Halligan			60			Director
Brian May			59			Director
James S. Metcalf			66			Director
Kevin Murphy(3)			53			President & Chief Executive Officer and Director
Alan Murray			70			Director
Thomas Schmitt			59			Director
Nadia Shouraboura			53			Director
Suzanne Wood			64			Director

 

(1)

Directors designated as independent by Ferguson are expected to be designated as “independent,” under Rule 303A.02 of the NYSE Listed Company Manual, by the New TopCo Board following the Merger. All of the directors other than Kevin Murphy and Bill Brundage are designated as independent by Ferguson.

(2)	Mr. Brundage was appointed on February 5, 2024.

(3)	Mr. Murphy was appointed on February 5, 2024.

Geoff Drabble was appointed as an Independent Non-Employee Director of Ferguson in May 2019 and as Chairman in November 2019. Mr. Drabble served as chief executive of Ashtead Group plc, a FTSE 100 international equipment rental company, from 2007 to 2019 during which he presided over a period of unprecedented growth in the business and was instrumental in creating a strong culture. He was previously an executive director of The Laird Group PLC, a former British-based electronics and technology business, where he was responsible for its Building Products division, and held a number of senior management positions at Black & Decker, the American manufacturer of power tools, accessories, hardware, home improvement products, home appliances and fastening systems. Mr. Drabble also serves as the Chair of DS Smith Plc. We believe that Mr. Drabble’s extensive experience as a board member and chief executive officer, extensive leadership experience in the distribution, technology and manufacturing sectors and deep knowledge of U.S. markets and operating conditions qualify him to serve on the New TopCo Board.

Kelly Baker was appointed as an Independent Non-Employee Director of Ferguson in May 2021. Ms. Baker currently serves as the executive vice president and chief human resources officer at Thrivent Financial for Lutherans, a Fortune 500 not-for-profit diversified financial services organization. Ms. Baker served as executive vice president and chief human resources officer of Pentair plc, a manufacturer of water products, from 2017 to 2021. Between 2016 and 2017, Ms. Baker served as executive vice president and chief human resources officer at Patterson Companies Inc., a value-added distributor serving dental and animal health markets. Ms. Baker spent over 20 years with General Mills Inc., the global food manufacturer, in a variety of roles, including vice president of human resources U.S. retail and marketing, vice president of human resources corporate groups and vice president of diversity and inclusion. Ms. Baker also currently serves as a member of the board of directors of The Opus Group. We believe that Ms. Baker’s extensive human resources and operational experience, wide-ranging international business and functional experience and experience leading the people, organizational and cultural development across a number of U.S.-based, global public companies qualify her to serve on the New TopCo Board.

Bill Brundage was appointed as an Executive Director and Chief Financial Officer of Ferguson in November 2020. Mr. Brundage was the chief financial officer of Ferguson Enterprises, LLC (“FEL”) from 2017 to 2020, having previously served at FEL as senior vice president of finance from 2016 to 2017 and vice president of finance since 2008. Mr. Brundage joined Ferguson in 2003 as manager of finance and was promoted to corporate controller of FEL two years later. Previously,

 

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Mr. Brundage spent five years at PricewaterhouseCoopers in the U.S. as a senior associate. As Ferguson’s Chief Financial Officer, Mr. Brundage brings valuable knowledge to the Board, while our Audit Committee maintains its independence. Mr. Brundage is a Certified Public Accountant. We believe that Mr. Brundage’s extensive Company experience, considerable financial management and operational experience and significant knowledge of Ferguson and Ferguson’s industry qualify him to serve on the New TopCo Board.

Catherine Halligan was appointed as an Independent Non-Employee Director of Ferguson in January 2019. Between 2010 and 2012, Ms. Halligan was senior vice president sales and marketing of PowerReviews, a software as a service social commerce solution. Prior to that, she served in various executive roles across marketing and e-commerce at Williams-Sonoma Inc. and at Walmart, where she served as the chief marketing officer of Walmart.com. Ms. Halligan is a member of the board of directors of Ulta Beauty, Inc., Driven Brands Holdings, Inc., and JELD-WEN Holding, Inc. and was previously a member of the board of directors of FLIR Systems, Inc from 2014 to 2021. Ms. Halligan also currently serves as a non-executive director of Anticimex, a privately-held international modern pest control company, a role she has held since October 2022. Ms. Halligan was a non-executive director of Wilton Brands, a recognized brand of cake decorating and bakeware products, from May 2016 to September 2018. We believe that Ms. Halligan’s extensive experience as a board member and as a senior executive, her extensive digital transformation, digital commerce, data analytics and marketing experience and strong track record in the retail, e-commerce and multi-channel arenas qualify her to serve on the New TopCo Board.

Brian May was appointed as an Independent Non-Employee Director of Ferguson in January 2021. Mr. May has served as a non-executive director of OFI Group Limited, a global provider of food and beverage ingredients, since 2021. Mr. May served as chief financial officer of Bunzl plc, the global distribution and services group, for 14 years until his retirement in late 2019. His career at Bunzl plc spanned 27 years, where he held a number of roles across the treasury and internal audit functions and was divisional finance director of Bunzl’s U.K., Europe and Australasia division for nine years. Prior to his career at Bunzl plc, he worked at KPMG. Mr. May is currently a member of the board of directors of Convatec Group Plc and was previously a member of the board of directors of United Utilities Group PLC, from 2012 to 2021, and Bunzl plc, from 2006 to 2019. Mr. May is also a qualified chartered accountant. We believe that Mr. May’s extensive experience as a chief financial officer and extensive financial and operational experience, together with his extensive expertise in Ferguson’s industry qualify him to serve on the New TopCo Board.

James S. Metcalf was appointed as an Independent Non-Employee Director of Ferguson in February 2023. Mr. Metcalf previously served as chairman and chief executive officer of Cornerstone Building Brands, Inc. (“Cornerstone”), a North American building products manufacturer, from 2019 until his retirement as chief executive officer in September 2021 and as chairman in March 2022. He joined Cornerstone in 2017 as a non-employee director when it was known as NCI Building Systems, Inc. Prior to joining Cornerstone, he held various roles at USG Corporation, a manufacturer of ceiling, floor, gypsum, roofing, sheathing, and wall products. At the time of his retirement from USG in November 2016, Mr. Metcalf had served as its chairman since December 2011 and served as its chief executive officer and president since January 2011. Mr. Metcalf previously serves as a member of the board of directors of NCI Building Systems from 2017 to 2018 and as chair of NCI from 2018 to 2019, until its acquisition by Cornerstone Building Brands). He also served as a member of the board of directors of Tenneco Inc. from 2014 to 2022, chair of USG Corporation from 2011 to 2016 and member of the board of directors of Molex Inc. from 2007 to 2013. We believe that Mr. Metcalf’s extensive executive leadership experience and considerable U.S. public company board and industry expertise qualify him to serve on the New TopCo Board.

Kevin Murphy was appointed as an Executive Director of Ferguson in August 2017 and as Chief Executive Officer in November 2019. Mr. Murphy was chief executive officer of FEL, Ferguson’s U.S. business segment, from 2017 until his appointment as Chief Executive Officer in 2019. Prior to that, he was chief operating officer of FEL from 2007 to 2017. Mr. Murphy joined Ferguson in 1999 as an operations manager following Ferguson’s acquisition of his family’s business, Midwest Pipe and Supply, and went on to hold a number of leadership positions before his eventual appointment as Ferguson’s Chief Executive Officer. Since Mr. Murphy’s appointment to the Board in 2017, the business has generated strong, profitable growth and continued to take market share under his leadership. We believe that Mr. Murphy’s strong executive leadership skills, deep knowledge of Ferguson and Ferguson’s industry, strategic operational expertise and significant experience in strategic development and delivering operational performance improvements qualify him to serve on the New TopCo Board.

Alan Murray was appointed as an Independent Non-Employee Director of Ferguson in January 2013. He has served as Employee Engagement Director from March 2019 until December 2023, when the role was disbanded, and served as Senior Independent Director from October 2013 until August 2022, when the role was transitioned to chair of the Nominations & Governance Committee. From 2002 to 2007, Mr. Murray served as group chief executive of Hanson PLC, a British-based building materials company, where he had previously served as finance director and chief executive of Hanson Building Materials America from 1998 to 2002. Since 2003, Mr. Murray has served as a trustee of the Hanson No 2 Pension Scheme for the Hanson Pension Trustees Limited. Mr. Murray currently serves as a member of the board of directors of O-I Glass, Inc. and

 

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previously served as a member of the board of directors of HeidelbergCement AG from 2010 to 2017, International Power plc from 2007 to 2011 and Hanson PLC from 2002 to 2007. Mr. Murray is a qualified chartered management accountant. We believe that Mr. Murray’s extensive business leadership skills and financial reporting expertise, considerable international operational and financial experience, extensive executive management experience and board experience within global businesses and extensive knowledge of Ferguson qualify him to serve on the New TopCo Board.

Thomas Schmitt was appointed as an Independent Non-Employee Director of Ferguson in February 2019. Mr. Schmitt served as president, chief executive officer and director of Forward Air Corporation, the NASDAQ-listed premium ground transportation company, from September 2018 to February 2024, and as chairman from May 2019 to February 2024. From 2015 to 2018, Mr. Schmitt was chief commercial officer and a management board member of Schenker AG, a $20 billion global freight, transportation and logistics company. Mr. Schmitt’s career began at BP and McKinsey and has encompassed leadership roles at AquaTerra, Purolator and FedEx. Mr. Schmitt also served as a member of the board of directors of Zooplus AG from 2013 to 2016. We believe Mr. Schmitt’s significant operational expertise and extensive knowledge of U.S. and international logistics and supply chain businesses, experience as a chief executive officer with significant first-hand leadership experience in the markets in which Ferguson operates and track record of driving accelerated profitable growth and promoting integrity, transparency and values-based leadership qualify him to serve on the New TopCo Board.

Nadia Shouraboura was appointed as an Independent Non-Employee Director of Ferguson in July 2017. In 2012, Ms. Shouraboura founded Hointer, Inc., a Seattle based consultancy that helped retailers create innovative in-store experiences, and served as its chief executive officer until November 2018. From 2004 to 2012, she was a vice president of global supply chain and fulfilment platform and a member of the senior leadership team at Amazon.com, Inc. Ms. Shouraboura currently serves as a member of the board of directors of Mobile TeleSystems Public Joint Stock Company and Ocado Group plc and previously served as a member of the board of directors of Cimpress, N.V. from 2014 to 2018 and X5 Retail Group N.V. from 2018 to 2022. We believe Ms. Shouraboura’s expertise in running complex logistics and supply chain activities, extensive experience with cutting-edge technology and e-commerce and substantial experience in the consumer and technology sectors qualify her to serve on the New TopCo Board.

Suzanne Wood was appointed as an Independent Non-Employee Director of Ferguson in January 2021. Ms. Wood served from September 2018 to September 2022 as senior vice president and chief financial officer of Vulcan Materials Company, a large producer of construction aggregates. From 2012 to 2018, she served as chief financial officer of Ashtead Group plc, a FTSE 100 international equipment rental company, after having joined Ashtead in 2003 as chief financial officer of Sunbelt Rentals, Ashtead’s largest operating brand in the U.S. She started her career with PricewaterhouseCoopers. Ms. Wood currently serves as a member of the board of directors of RELX PLC and H&E Equipment Services, Inc and previously serves as a member of the board of directors of Ashtead Group plc from 2012 to 2018. Ms. Wood is a chartered accountant. We believe Ms. Wood’s experience as a chief financial officer, significant financial and operational knowledge and extensive public company experience qualify her to serve on the New TopCo Board.

Executive Officers

The following table lists, as of March 1, 2024, the names, ages, titles and biographical information for each person who is expected to serve as an executive officer of New TopCo following the Merger. The biographies of executive officers who also serve as directors are included in the Directors section above. Except as set forth below, each of Ferguson’s executive officers will be appointed to serve as an executive officer of New TopCo prior to the Effective Time.

 

Name		Age				Title
Kevin Murphy(1)			53			President & Chief Executive Officer and Director
Bill Brundage(2)			47			Chief Financial Officer, Chief Accounting Officer & Treasurer and Director
Ian Graham(3)			55			Chief Legal Officer & Corporate Secretary
Michael Jacobs			63			Senior Vice President of Supply Chain
Victoria Morrissey			57			Chief Marketing Officer
Andy Paisley			56			Chief Digital and Information Officer
Jake Schlicher			59			Senior Vice President of Strategic Development
Bill Thees			57			Senior Vice President of Business and Sales
Garland Williams			49			Senior Vice President

 

(1)	Mr. Murphy was appointed on February 6, 2024.

(2)	Mr. Brundage was appointed on February 6, 2024.

(3)	Mr. Graham was appointed on February 6, 2024.

 

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Ian Graham joined Ferguson as Chief Legal Officer in May 2019. Prior to joining Ferguson, he was Senior Vice President, General Counsel and Secretary for BAE Systems, Inc. from 2010 to 2019. Prior to that he held senior roles at EMCORE Corporation, UUNET Technologies, Jenner & Block LLP and McKenna & Cuneo LLP.

Michael Jacobs was appointed Senior Vice President of Supply Chain of Ferguson in February 2017. He is responsible for managing all aspects of the supply chain processes within Ferguson and developing a supply chain strategy that meets performance objectives and customer expectations. Prior to Ferguson, Mr. Jacobs held various roles at Keurig Green Mountain, including Chief Product Officer and Chief Logistics Officer, where he led the re-engineering of Keurig’s supply chain. Prior to Keurig, Mr. Jacobs served as Senior Vice President, Logistics for Toys “R” Us, where he led store, ecommerce and omni-channel fulfilment globally.

Victoria Morrissey was appointed as Chief Marketing Officer of Ferguson in May 2021. With more than 20 years of diversified experience, Ms. Morrissey was most recently responsible for Global Marketing and Brand at Caterpillar Inc. from 2017 to 2021, where she led a global team with oversight of brand, digital marketing, analytics, customer insights and customer experience. Prior to this, she led brand and content marketing at Grainger. In addition to her industry experience, Ms. Morrissey worked at several agencies, including WPP, one of the world’s largest advertising agencies.

Andy Paisley became the Chief Digital and Information Officer for Ferguson in June 2023 after joining Ferguson in January 2023 as the Chief Information Officer. He is responsible for overseeing Digital Commerce, Digital Engineering, Digital Data, User Experience and Commerce Operations. Prior to joining Ferguson, Mr. Paisley served as the chief information officer of Dollar Tree, Inc. from December 2020 until 2022, Old Dominion Freight Line, Inc. from 2017 to 2020 and Advance Auto Parts, Inc. from 2014 to 2017, where he aligned the technology strategy with business strategy and improved the digital experience for associates and customers.

Jake Schlicher was named Senior Vice President of Strategic Development of Ferguson in February 2019. He focuses on developing strategies that help make our customers’ complex projects simple, successful and sustainable. Mr. Schlicher joined Ferguson in 1999 through the acquisition of L&H Supply. Since then, Mr. Schlicher has held numerous positions including Director of the Residential Business Group, Vice President of Private Label, Vice President of the Strategic Products Group, and Vice President of the Commercial Business. In March 2016, he was named Senior Vice President of Ferguson Facilities Supply and, in November 2017, he was named Senior Vice President Strategic Brand Development.

Bill Thees was promoted to Senior Vice President of Business and Sales of Ferguson in 2018. He provides leadership and direction to the Waterworks and Fire & Fabrication customer groups, the Own Brand Business, enterprise-wide Sales, Operations and Wolseley Canada. Mr. Thees began his career with Ferguson in 1990 as a trainee at the Orlando, Florida Waterworks location. Since then, he has held several key positions, including Branch Manager, General Manager and District Manager. Mr. Thees assumed leadership for the Waterworks Business Group in 2007 and was promoted to Vice President in 2009.

Garland Williams serves Ferguson as a Senior Vice President and previously served as the Senior Vice President of Customer Experience and Canada between 2021 and 2022. He is responsible for Ferguson’s Blended business and provides strategic leadership and has profit and loss responsibilities for the Residential Trade, Residential Building & Remodel, Commercial/Mechanical, HVAC, Industrial and Facilities Supply businesses. Mr. Williams joined the organization as a trainee in July 1996 and has held several progressive roles over his 27-year career with Ferguson. This has included inside and outside sales, Branch and Area Manager, General Manager, District Manager, Vice President of Residential Trade, and, most recently, as Vice President of Customer Experience and Canada in 2020.

Number, Terms of Office and Appointment of Directors and Officers

We expect no material change to the manner in which directors and executive officers are appointed or to the term they serve pursuant to Ferguson’s Governing Documents as a result of the Merger. All directors of New TopCo will serve a one-year term, except that the initial term for each such director will run until New TopCo’s first annual meeting of stockholders, which is expected to occur in late 2024. All directors of New TopCo will be subject to election by stockholders at each annual meeting of stockholders.

The Ferguson Board is authorized to delegate to any person such of its powers, as it deems appropriate. The New TopCo Board also has these same powers to appoint executive officers to serve at their discretion, rather than for specific terms of office.

Family Relationships

There are no family relationships between any of the executive officers and directors of Ferguson or New TopCo.

 

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Director Independence

The persons who currently serve as the directors and executive officers of Ferguson plc (other than Ms. Sammie Long, who will retire from her position at Ferguson, effective July 31, 2024) are expected to serve as the directors and executive officers of New TopCo following the Merger, subject to the appointment, death, resignation or removal of any directors or executive officers on or prior to the Effective Time. Upon completion of the Merger, the shares of New TopCo Common Stock are expected to be listed on the NYSE and the LSE. Consequently, New TopCo will adhere to the applicable NYSE and SEC rules and regulations in determining whether a director is “independent.” The New TopCo Board expects to follow policies and procedures similar to those currently followed by the Ferguson Board in determining the independence of its directors.

The Nominations & Governance Committee of the Ferguson Board reviews the independence of each director annually and makes recommendations to the Ferguson Board, and the Ferguson Board annually determines and discloses the independence of the directors.

No director is considered independent unless the Ferguson Board, considering all relevant facts and circumstances, affirmatively determines that the director has no material relationship with Ferguson, either directly or as a partner, shareholder or officer of an organization that has a relationship with Ferguson. In assessing whether a director has no material relationship with Ferguson, the Ferguson Board also considers any persons or organizations with which the director has an affiliation. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, among others.

In addition, members of the Audit, Compensation and Nominations & Governance Committees of the Ferguson Board must meet all additional applicable independence tests of the NYSE and any additional standards imposed under U.S. securities laws and the rules and regulations of the SEC.

The Ferguson Board has considered whether the members of the Ferguson Board are independent and determined that each of the directors on the Ferguson Board other than Ferguson’s executive directors is an “independent” director under applicable NYSE and SEC rules and regulations, and each satisfies the applicable NYSE and SEC rules and regulations for “independence” with respect to the committees of the Ferguson Board on which such director serves.

In making its independence determination in fiscal 2023, the Ferguson Board considered that some of the Non-Employee Directors, or their immediate family members, are affiliated with companies or entities to which Ferguson sold products or made payments, or from which Ferguson purchased products or services during the last fiscal year. This included transactions that do not require disclosure under Item 404 of Regulation S-K (“Regulation S-K”) promulgated under the U.S. Securities Exchange Act and therefore are not disclosed in “Certain Relationships and Related Party Transactions—Approved Related Party Transactions,” such as that Ms. Shouraboura’s spouse is a senior executive at Microsoft Corporation from which Ferguson purchases products and services. Aggregate payments to or from Microsoft Corporation, in each of the last three fiscal years, did not exceed the greater of $1 million or 2% of that organization’s consolidated gross revenues in a single fiscal year. In reviewing these relationships, the Ferguson Board considered all relevant factors, including whether the transactions were entered into at arm’s length in the normal course of business and, to the extent they were commercial relationships, had standard commercial terms; and whether the director had any direct business relationships with Ferguson or received any direct personal benefit from these transactions, relationships, or arrangements.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of February 15, there were 3 stockholders of New TopCo, Kevin Murphy, Bill Brundage and Ian Graham, who each own one share, or 33¹/₃% of outstanding shares of New TopCo Common Stock. On the terms of and subject to the conditions of the Merger Agreement, at the Effective Time, New TopCo will be the sole shareholder of Ferguson plc (which will be renamed Ferguson (Jersey) Limited at the Effective Time) and each existing share of New TopCo Common Stock issued and outstanding immediately prior to the Effective Time will be cancelled. In addition and simultaneously, (i) each Ferguson Share that is issued and outstanding at the Merger Record Time will automatically be cancelled without any repayment of capital and New TopCo will issue as consideration therefor new, duly authorized, validly issued, fully paid and non-assessable shares of New TopCo Common Stock to each Ferguson Shareholder on a one-for-one basis for each Ferguson Share held by such Ferguson Shareholder immediately preceding the Merger Record Time and (ii) each U.K. DI representing an issued and outstanding Ferguson Share at the Merger Record Time will be cancelled and a New TopCo U.K. DI representing one share of New TopCo Common Stock will be issued through CREST by the Depositary as consideration therefor to each holder of U.K. DIs on a one-for-one basis for each U.K. DI held by such holder immediately preceding the Merger Record Time.

The table below shows the total number of Ferguson Shares beneficially owned by (i) each of the directors and named executive officers of Ferguson, (ii) all those known by us to beneficially own more than 5% of the Ferguson Shares and (iii) all of the directors and executive officers of Ferguson, as a group, as of February 15, 2024.

The number of Ferguson Shares beneficially owned is determined in accordance with the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any Ferguson Shares over which the individual has sole or shared voting power or investment power, or the right to receive the economic benefit of ownership, as well as any shares that the individual has the right to acquire within 60 days of February 15, 2024 through the exercise of any option, warrant or other right.

The percentage of ordinary shares beneficially owned is calculated on the basis of 202,878,753 Ferguson Shares outstanding as of February 15, 2024. Ferguson Shares that a person has the right to acquire within 60 days of February 15, 2024 are deemed outstanding for purposes of computing the percentage ownership of the person holding such right, but are not deemed outstanding for purposes of computing the percentage ownership of any other person. Unless otherwise indicated, (i) subject to applicable community property laws, each beneficial owner listed below has sole voting and investment power and the right to receive the economic benefit of ownership with respect to all Ferguson Shares held by that person and (ii) the address of each beneficial owner listed in the following table is c/o Ferguson plc, 1020 Eskdale Road, Winnersh Triangle, Wokingham, Berkshire, RG41 5TS, U.K.

 

		Number of Ferguson Shares Beneficially Owned				Percentage of Ferguson Shares Beneficially Owned
Directors and Named Executive Officers
Kelly Baker			1,114				*
Bill Brundage			35,191				*
Geoff Drabble			5,443				*
Ian Graham			5,854				*
Catherine Halligan			1,338				*
Sammie Long			25,689				*
Brian May			993				*
James S. Metcalf			4,277				*
Kevin Murphy			123,469				*
Alan Murray			2,860				*
Thomas Schmitt			1,763				*
Nadia Shouraboura			1,492				*
Bill Thees			25,428				*
Suzanne Wood			992				*
All Directors and Executive Officers as a Group			249,554				*
Greater Than 5% Beneficial Owners
BlackRock, Inc.(1)			13,305,591				6.6	%
Vanguard(2)			25,804,490				12.7	%
*   Represents less than 1% of Ferguson Shares outstanding. (1)   Based on the Schedule 13G filed by BlackRock, Inc. with the SEC on February 2, 2024, BlackRock, Inc. and its subsidiaries beneficially owned an aggregate of 13,305,591 ordinary shares as of February 14, 2023, and BlackRock, Inc. had sole voting power over

 

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11,974,293 ordinary shares, shared voting power over 0 ordinary shares, sole dispositive power over 13,305,591 ordinary shares and shared dispositive power over 0 ordinary shares. The address for BlackRock, Inc. is 50 Hudson Yards, New York, NY 10001. (2)   Based on the Schedule 13G filed by The Vanguard Group, Inc. with the SEC on February 13, 2024, The Vanguard Group, Inc. beneficially owned an aggregate of 25,804,490 ordinary shares, had sole voting power over 0 ordinary shares, shared voting power over 1,711,313 ordinary shares, sole dispositive power over 23,766,671 ordinary shares and shared dispositive power over 2,037,819 ordinary shares as of January 10, 2023. The principal business office address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.

 

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EXECUTIVE AND DIRECTOR COMPENSATION

Director Compensation

The following table summarizes the compensation awarded or paid to the Non-Employee Directors for the year ended July 31, 2023. The persons who currently serve as the directors and executive officers of Ferguson plc (other than Ms. Sammie Long, who will retire from her position at Ferguson, effective July 31, 2024) are expected to serve as the directors and executive officers of New TopCo following the Merger, subject to the appointment, death, resignation or removal of any directors or executive officers on or prior to the Effective Time. Immediately following the Merger, we expect no variation to the compensation to be awarded or paid to the non-employee members of the New TopCo Board compared to compensation awarded or paid to the non-employee members of the Ferguson Board.

 

Name		Fees Earned or Paid in Cash ($)(1)				Stock Awards ($)(2)				All Other Compensation ($)(3)(4)				Total ($)
Chairman of the Ferguson Board
Geoff Drabble			499,181				55,499				23,234				577,914
Other Non-Employee Directors
Kelly Baker			129,000				60,000				44,633				233,633
Catherine Halligan			110,000				60,000				29,163				199,163
Brian May			101,436				55,499				13,221				170,156
James S. Metcalf(5)			55,000				60,000				27,307				142,307
Alan Murray(6)			162,000				60,000				42,199				264,199
Thomas Schmitt			110,000				60,000				27,059				197,059
Nadia Shouraboura			110,000				60,000				45,236				215,236
Suzanne Wood			129,000				60,000				45,868				234,868
Jacky Simmonds(7)			38,879								12,535				51,414

 

(1)

U.S.-based Non-Employee Directors are paid in USD and U.K.-based Non-Employee Directors are paid in GBP. Each month we calculate any U.K. tax due on U.S.-based Non-Employee Director fees using the U.K. tax authorities (HMRC) official exchange rate for the month. The fees of the two U.K.-based Non-Employee Directors (Messrs. Drabble and May) have been converted into USD using the same official exchange rate.

(2)

Represents the grant date fair value of restricted stock units, calculated in accordance with FASB ASC Topic 718, issued to our Non-Employee Directors on December 8, 2022 (except for Mr. Metcalf’s award, which was issued on March 16, 2023). The aggregate number of restricted stock units outstanding as of July 31, 2023 for our Non-Employee Directors was as follows: 485 restricted stock units for each of Messrs. Murray and Schmitt, and Ms. Baker, Ms. Halligan, Ms. Shouraboura and Ms. Wood; 454 restricted stock units for each of Messrs. Drabble and May; and 232 restricted stock units for Mr. Metcalf.

(3)

The Non-Employee Directors receive a travel allowance of $3,250 (each way) (£2,500 for U.K.-based Non-Employee Directors), where there would be a need for intercontinental flight in excess of five hours (one way) based on the home location of the Non-Employee Director and the location of the Ferguson Board (or Ferguson Board committee) meeting, up to a maximum of $39,000 per annum (£30,000 for U.K.-based Non-Employee Directors). This is in addition to reimbursement for actual travel costs, including airfare and hotel.

(4)	In the U.K., some travel expenses related to Ferguson Board meeting attendance are considered by the U.K. tax authorities to be ‘taxable benefits,’ consequently the Company pays the tax on these expenses including any applicable tax gross-up.

(5)	Mr. Metcalf was appointed to the Ferguson Board effective February 1, 2023.

(6)	Mr. Murray served as the Employee Engagement Director during fiscal 2023.

(7)	Ms. Simmonds’ service on the Ferguson Board ended on November 30, 2022.

Narrative to Non-Employee Director Compensation

Below is a discussion of the material factors necessary to an understanding of the compensation disclosed in the above table.

How We Set Non-Employee Director Compensation

The Ferguson Board, upon recommendation of the Compensation Committee, determines the annual compensation of Non-Employee Directors each year with account taken of the time and responsibility involved in each role, including, where applicable, the chairmanship of Ferguson Board committees. Directors who are executives of Ferguson receive no compensation

 

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for their board service. The Compensation Committee consults with Mercer U.S. LLC (“Mercer”), one of its independent compensation consultants, on the director compensation program and reviews survey information of compensation paid to directors serving on boards of similar U.S.-listed companies to determine whether changes are advisable.

Non-Employee Director Fees

A summary of the annualized fees for fiscal 2023 is as follows:

 

		Fees(1)(2)(3) ($000)
Chairman of the Ferguson Board’s Fee			536.0
Other Non-Employee Directors’ Base Fee			110.0
Fees in Addition to Base Fee:
Chairperson of Audit Committee			28.5
Chairperson of Compensation Committee			28.5
Chairperson of Nominations & Governance Committee			28.5
Employee Engagement Director(4)			14.0

 

(1)	Increases to Non-Employee Director and Chairman of the Ferguson Board fees from the prior fiscal year were to align them to fee levels in the U.S. for Non-Employee Directors.

(2)	The Non-Employee Directors also have the benefit of a travel allowance and certain tax benefits as described in footnote (3) to All Other Compensation in the Director Compensation table.

(3)	The amounts provided in the table for the Chairman of the Ferguson Board’s fees were converted to USD from GBP based on the agreed GBP:USD exchange rate from fiscal 2022 which is GBP 1.00 : USD 1.3041.

(4)	The role of Employee Engagement Director was disbanded during fiscal 2024.

Effective October 1, 2023, the Compensation Committee approved an ordinary course annual increase to the base fees paid to our Non-Employee Directors (other than the Chairman of the Ferguson Board) from $110,000 to $120,000. There were no changes to the fees for the Chairman of the Ferguson Board or to additional fees paid to Non-Employee Directors in respect of service as a committee chair. Additionally, the role of the Employee Engagement Director was disbanded in fiscal 2024.

The Non-Employee Directors are not entitled to receive any compensation upon the termination of their appointment and no fees will be payable in respect of any unserved portion of the term of their appointment. Further, Non-Employee Directors are not entitled to participate in Ferguson’s annual short-term incentive award program or other benefit plans. Each Non-Employee Director is entitled to reimbursement from Ferguson for reasonable expenses incurred in the performance of their duties. The Non-Employee Directors may, in certain circumstances and at Ferguson’s expense, obtain independent professional advice in the furtherance of their duties as Non-Employee Directors.

Non-Employee Director Equity Incentive Awards

The NED Plan was adopted by the Ferguson Board in September 2022 and approved by our shareholders in November 2022. The aggregate number of ordinary shares authorized under the NED Plan was 250,000 shares. On December 8, 2022, each of our then current Non-Employee Directors was granted restricted stock units pursuant to the NED Plan that vested on October 2, 2023. The number of restricted stock units awarded was based on a grant date fair market value of $60,000 for non-U.K.-based Non-Employee Directors and £46,000 for our U.K.-based Non-Employee Directors (Messrs. Drabble and May). Each restricted stock unit represents the economic equivalent of one share of our ordinary shares. The first grants under the NED Plan were made to our then current Non-Employee Directors shortly after obtaining shareholder approval in November 2022, and had a shorter than one year time-vesting requirement given these directors’ service pre-dated shareholder approval of the NED Plan. We issued annual awards of restricted stock units under the NED plan to our Non-Employee Directors in October of 2023 in respect of service for fiscal 2024. The number of restricted stock units awarded was based on a grant date fair market value of $120,000 for non-U.K.-based Non-Employee Directors and £92,000 for our U.K.-based Non-Employee Directors (Messrs. Drabble and May). These restricted stock units were subject to time-vesting for one year following the grant date; however, to align with U.S. practices and to have the vesting concurrent with the annual meeting of shareholders, effective March 7, 2024, the restricted stock units that were issued to the Company’s Non-Employee Directors on October 12, 2023 under the Company’s NED Plan were cancelled (the “Cancelled Director Awards”) and a replacement grant of restricted stock unit awards, for the same number of restricted stock units that had been issued under the Cancelled Director Awards with a vesting date of Ferguson’s next annual shareholders meeting, was made to each of the Company’s Non-Employee Directors under the 2023 Omnibus Plan. These restricted stock units are entitled to accrue cash dividend equivalents during the vesting period as dividends are paid on our

 

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ordinary shares. Any such accrued dividend equivalents are subject to the same vesting conditions as the underlying restricted stock units and will be converted into additional restricted stock units based on the fair market value of our shares on the vesting date. New TopCo will not be adopting the NED Plan. Future grants of restricted stock units are expected to be made to our Non-Employee Directors under the Omnibus Plan in connection with the annual meeting of shareholders each year and be subject to time-vesting with a vesting date of Ferguson’s immediately subsequent annual shareholders meeting, for approximately one year following the grant date. Once vested, the restricted stock units will be settled in Ferguson Shares. If a new Non-Employee Director is appointed after the date of the annual equity awards for the year, the new Non-Employee Director will receive an award under the Omnibus Plan with the same terms as made to other Non-Employee Directors for the year, but with the amount of the award prorated based on the number of days remaining in the year that the individual became a Non-Employee Director.

Stock Ownership Guidelines for Non-Employee Directors

To provide for our Non-Employee Directors to become and remain meaningfully invested in Ferguson Shares, they are required under our share ownership guidelines to own shares having a market value equal to four times the Other Non-Employee Directors’ Base Fee (not including additional fees for Ferguson Board committee chairpersons or other additional roles). A Non-Employee Director must meet the share ownership requirement within five years from the date of the current guidelines (October 1, 2023) or the Director’s date of appointment. The Non-Employee Directors must retain all future awards (on a net of tax basis) until compliance is achieved. The following shares will count towards the assessment of whether the target is met: (i) shares beneficially held directly or indirectly by the Non-Employee Director and any person closely associated (as set out in Ferguson’s Share Dealing Policy) with the Non-Employee Director; and (ii) the number of shares awarded, but not vested at the date of review, under any restricted share award plan (in respect of which there was not any performance condition attached), on an assumed net of tax basis.

All of our current Non-Employee Directors have met or are on track to meet the share ownership requirement within the five-year timeframe.

Executive Compensation Discussion and Analysis (“CD&A”)

The purpose of this CD&A is to describe:

 

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our executive compensation philosophy;

 

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the Compensation Committee’s decision-making process;

 

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how our compensation program supports our long-term strategy and long-term interests of our shareholders; and

 

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information about the material elements of compensation that are paid, awarded to, or earned by, our “Named Executive Officers,” (“NEOs”).

Immediately following the Merger, we expect no variation to the compensation to be awarded or paid to executive officers of New TopCo compared to the compensation awarded or paid to the executive officers of Ferguson plc. Our NEOs consist of our Principal Executive Officer, Principal Financial Officer, and the three other most highly compensated executive officers. For fiscal 2023, our NEOs were:

 

Name		Position
Kevin Murphy		Chief Executive Officer and Executive Director
Bill Brundage		Chief Financial Officer and Executive Director
Ian Graham		Chief Legal Officer
Sammie Long		Chief Human Resources Officer
Bill Thees		Senior Vice President of Business and Sales

Ms. Long and Messrs. Graham and Thees became NEOs in fiscal 2023 when Ferguson determined that it no longer qualified as a foreign private issuer and, effective as of August 1, 2023, is considered a domestic issuer under the Exchange Act.

Compensation Philosophy and Objectives

Our executive compensation program is built on the principles that executives are rewarded based on financial results and that executive pay is aligned with the broader stakeholder experience. We have strived to create an executive compensation program that balances short-term versus long-term payments and awards, cash payments versus equity awards, and fixed versus

 

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