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