Cairngorm Capital Case Studies

Independent Builders Merchant Group case study

IBMG is the largest building materials distributor in the South of England, formed through more than 20 acquisitions made since the start of 2018. While IBMG has retained many of the strong local brands across its business, it operates as one integrated company led by a single management team.

IBMG primarily serves trade customers operating in the repair, maintenance, and improvement of residential property. The group operates through five divisions, with the core builders merchant branches supported by a network of specialty plumbing & heating, roofing and electrical branches, and a dedicated timber processing and distribution business. IBMG today has over 170 branches operating across the south of England, with combined revenues of c.£650m and over 2,000 employees.

Visit the IBMG website at www.independentbm.com

Acquisition of Parkers

Group: 15 branches; c.£67m revenues; 280 Group employees

Cairngorm Capital’s investment was the first in a series of planned investments in the builders merchant industry, to combine specialist sector operational expertise with financial support from Cairngorm Capital.

Acquisition

Parkers: Acquired in Mar-18:

  • 15 branch builders merchant based in the South East

Location

Strategy

  • Sector consolidation to build the leading independent builders’ merchant in the South of England
  • Continued focus on high stock availability and service levels
  • Retain local branch based decision making, with value added branch support centre
  • Drive up revenue and improve operating margin performance from bottom to top quartile, through improved merchandising, thoughtful supply chain management and geographic expansion
  • New executive management team joined the company in conjunction with this investment

Acquisition of Stamco, Fairalls, Chandlers, Grant & Stone and 3 Counties

Group: 69 branches; c.£280m revenues; 1,100 + Group employees

Parkers combined with Stamco, Fairalls and Chandlers to form IBMG over the course of June 2019 to October 2019. Cairngorm Capital’s initial investment in Grant & Stone was made in November 2019, initially as a standalone platform. Grant & Stone acquired 3 Counties in September 2020

Acquisition

Stamco: Acquired in Jun-19:

  • 5 branch builders and timber merchant in the South East. Operates a large timber processing and distribution site in Hastings

Fairalls: Acquired in Jul-19:

  • 4 branch builders merchant in Surrey and Kent

Chandlers: Acquired in Oct-19:

  • 14 branch with both builders merchanting and specialist roofing supplies branches operating in Kent, Essex, London & The Midlands

Grant & Stone: Acquired in Nov-19:

  • 29 branch operating builders merchanting branches along with specialist plumbing merchants and electrical distributors

3 Counties: Acquired in Sep-20:

  • 2 branch builders merchant in Aylesbury and Hemel Hempstead

Location

Strategy

  • Add 23 highly complementary branches to the existing Parkers network, in terms of geography, product type and customer type, as well as expand the Group’s capability through a timber processing site at Hastings, which has the capacity to serve all Group branches
  • Investment in the Grant & Stone brand, adding 29 branches across general builders merchants and expanding the Group into specialist plumbing & heating and electrical brands
  • Continued focus on high stock availability and service levels
  • Retain local branch based decision making, with value-added branch support centre
  • Focus on driving up revenue and improving operating margin performance through improved merchandising, thoughtful supply chain management and geographic expansion

Acquisition of CRS, RGB, Buildit, TPS Devondale, DW Burns, SPS and Perrys

Group: 134 branches; c.£550m revenues; 1,500+ Group employees

Grant & Stone acquired CRS, RGB, Buildit, TPS and Devondale over the course of January to May 2021. In September 2021, IBMG in the South East (Parkers, Chandlers, Fairalls, Stamco) merged with the Grant & Stone group to form the largest independent merchant in the South of England. IBMG subsequently acquired 4 businesses: DW Burns, SPS, Devondale Dorset and Perry’s expanding the group’s branch footprint.

Acquisition

CRS: Acquired Jan-21:

  • 13 branch builders merchant in Somerset

RGB: Acquired Feb-21:

  • 22 branch builders merchant in Devon and Cornwall

Total Plumbing Supplies:

  • 5 branch plumbers merchant in Somerset

Buildit: Acquired in Feb-21:

  • 3 branch builders merchant in Gloucester and Wiltshire

Devondale: Acquired in May-21:

  • 9 branch electrical distributor in the South West

DW Burns: Acquired in Oct-21:

  • 3 branch plumbers merchant in Surrey

SPS: Acquired in Oct-21:

  • 8 branch plumbers merchant in the South East

Perrys: Acquired in Oct-21:

  • 1 branch builders merchant in Plymouth

Devondale Dorset: Acquired in Dec-21:

  • 2 branch electrical distributor in the South West

Location

Strategy

  • Continued expansion of branch network across the South with 65 additional branches across builders merchants, plumbing and heating, and electrical
  • Retaining all local trading brands operating under the IBMG banner while developing central function to support brands
  • Build out senior leadership team with key hires made across Group functions
  • Continue to drive revenue and operating margins through benefits of combined group scale, improved procurement and merchandising and geographic expansion

Acquisition of Dougfield, Pennyhill, CSS Electrical, Cornish Fixings, Hoppings, Merkko, Independent Roofing Supplies and Wantage Builders Merchant

Group: 171 branches; c.£650m revenues; 2,000 + Group employees

IBMG continues to consolidate the leading independent builders merchants in the South of England with 8 acquisitions completed: Dougfield, Pennyhill, CSS Electrical, Cornish Fixings, Hoppings, Merkko, Independent Roofing Supplies, and Wantage Builders Merchant, along with 11 new greenfield sites opened.

Acquisition

Dougfield: Acquired Jan-22:

  • 11 branch plumbers merchant in the South West and Wales

Pennyhill: Acquired Feb-22:

  • 1 branch Timber merchant operating out of Woking

CSS Electrical: Acquired in Feb-22:

  • 2 branch electrical distributor based in North London

Cornish Fixings: Acquired in Feb-22:

  • 1 branch builders merchant in Cornwall

Hoppings: Acquired in Apr-22:

  • 2 branch timber merchant operating from two sites in Epping and Lingfield

Merkko: Acquired in May-22:

  • 2 branch builders merchant in the Thames Valley

Independent Roofing Supplies: Acquired in May-22:

  • 3 specialist roofing supplies branches based in the South East

Wantage: Acquired in May-22:

  • 1 branch builders merchant in Wantage

Location

Strategy

  • Continued expansion of branch network across the South with 10 additional branches acquired across all five divisions
  • Accelerating group’s own new branch openings with 11 new greenfield sites opened
  • Continue to build out management team depth with settled senior leadership team now in place and key positions filled
  • Retain local trading brand while benefitting from operating as one group

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