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. Three further proprietary investments in 2019 have created the largest independent builders’ merchant in the South East of England, led by a management team with deep industry expertise. On completion of the fourth acquisition, Chandlers Building Supplies, in October 2019, a new umbrella brand for the group was created, Independent Builders Merchant Group.
The business primarily serves trade customers with its core offering of heavyside building materials, civils, roofing & timber, plus an array of ancillary product lines including kitchens, plumbing & heating, joinery and architectural ironmongery. The new enlarged company, which will be part of a holding company known as the Independent Builders’ Merchant Group (IBMG), has 37 branches operating from the Midlands to the South East, with combined revenues of £180 million and over 750 employees.
Acquisition of Parker – 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, from its first fund Cairngorm Capital Partners I LP, is the first in a series of planned investments in the builders’ merchant industry, which will 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
Acquisition of Stamco – June 2019
Group: 20 branches; c.£100m revenues; 440+ 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
- FY18 revenue of c.£32m
- Complementary branch footprint to Parkers
Location
Strategy
- Create the largest independent builders’ merchant in the South East of England
- Add five 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 Parkers branches
- Supply chain collaboration to provide customers with the highest quality products
- Improve branch operating performance with benefits of combined group scale
Acquisition of Fairalls – July 2019
Group: 24 branches; c.£115m revenues; 500+ staff
Acquisition
Fairalls (4 branches, 85 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
- FY18 revenue of c.£14m delivering high margins
Location
Strategy
- Continued expansion of branch network towards London
- Adds four highly complementary branches to existing Parkers network, in terms of geography, product type and customer type
- Expand group capability with bagged aggregates processing
Merger with Chandlers – October 2019
Group: 37 branches; c.£180m revenues; 750+ staff
Acquisition
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
- Strong customer service focus
- Revenue of around £60m
Location
Strategy
- Continued expansion of branch network across the South East and London
- Merger creates the stand-out leading independent builders’ merchant in the South East of England
- Expand group capability with roofing and civils category expertise
