Cairngorm Capital Case Studies
Independent Builders Merchant Group case study
In March 2018 Cairngorm Capital acquired Parker Building Supplies, a leading independent builders’ merchant based in Sussex and Kent. Over 12 additional proprietary investments between 2019 and 2021 have created the largest independent builders’ merchant in the South of England, operating under the Independent Builders Merchant Group (‘IBMG’) umbrella brand, and led by a management team with deep industry expertise.
The business primarily serves trade customers operating largely in the repair, maintenance and improvement of residential property. IBMG operates through six divisions, with the core builders’ merchant branches supported by a network of specialty plumbing & heating, roofing and electrical branches, a dedicated timber processing and distribution business, and a strong online presence. The group today has more than 140 branches operating across the south of England, with combined revenues exceeding £500 million and over 1,700 employees.
Acquisition of Parkers – March 2018
Group: 15 branches; c.£67m revenues; 280 staff
Acquisition
Parkers (15 branches, 280 employees):
- Founded in 1984 Parkers is a leading independent builders’ merchant based in the South East of England, primarily selling to trade customers
- FY18 revenue of c.£67m
- Heavyside focused builders’ merchant, with strong reputation for customer service
- 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
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 and Chandlers: June – October 2019
Group: 38 branches; c.£180m revenues; 750+ staff
Acquisition
Stamco (5 branches including central Stamco Timber processing site, 160 employees):
- Founded in 1957 Stamco supplies a similar mix of heavyside and lightside building products to Parkers
- Benefits from a large timber processing and distribution site in Hastings, which supplies timber to its branches as well as third party customers
Fairalls (4 branches, 80 employees):
- Founded in 1900 Fairalls operates from 4 branches to the south of the M25
- Similar heavyside product mix and customer type to Parkers, with addition of a wider range of lightside products
- Strong customer service focus
Chandlers (14 branches, 230 employees):
- Established in 1993 Chandlers operates from 14 across Sussex, Kent, Surrey, London, Essex and the West Midlands
- Similar heavyside product mix and customer type to Parkers, with addition of six specialist roofing supplies centres, and a strong focus on civils product category
Location
Strategy
- Create the largest independent builders’ merchant in the South East of England
- Add 23 highly complementary branches to existing Parkers network, in terms of geography, product type and customer type
- Expand group capability with timber processing site at Hastings, with capacity to serve all group branches
- Supply chain collaboration to provide customers with the highest quality products
- Improve branch operating performance with benefits of combined group scale
Acquisition of Grant & Stone and online division, Trading Depot: November 2019
Group: 67 branches; c.£280m revenues; 1,100+ employees
Acquisition
Grant & Stone (29 branches, 360 employees):
- Established in 1987 and based in High Wycombe, Grant & Stone is a leading builders’, electrical and plumbing merchant with a strong focus on customer service
- FY19 revenues of c.£100m
- Cairngorm Capital’s initial investment in Grant & Stone was made in Nov 2019, initially as a standalone platform
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 through improved merchandising, thoughtful supply chain management and geographic expansion
- Develop online presence
Acquisition of 3 Counties, CRS, RGB, Buildit, TPS, Devondale, Perrys, DW Burns and SPS: October 2020 to October 2021
Group: 140 branches; c.£0.5bn revenues; 1,700+ staff
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: 3 branch builders merchant in Gloucester and Wiltshire
- Devondale: 9 branch electrical distributor in the South West
- Perrys: Single branch builders merchant in Cornwall
- DW Burns: 2 branch plumbers’ merchant in Surrey
- SPS: 11 branch plumbers’ and heading merchant in Sussex and Kent
Location
Strategy
- Continued expansion of branch network across the South West with 66 additional branches across builders merchants, plumbing and heating, and electrical
- Merger creates the stand-out leading independent builders’ merchant in the South of England
- Further strengthens calibre of group management team
Merger
- Sep-21: IBMG in the South East (Parkers, Chandlers, Fairalls, Stamco) merge with the Grant & Stone group (Grant & Stone, 3 Counties, CRS, RGB, TPS, Buildit, Devondale), to form the largest independent merchant in the South of England
- Combined group has 140 branches and £0.5bn revenues, all operating on the same ERP system, and led by a high performing management team
- Continues to operate under the IBMG umbrella brand, while retaining all local trading brands
