Cairngorm Capital Case Studies
Parker 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. The business primarily serves trade customers with its core offering of heavyside building materials, timber, plus an array of ancillary product lines including, plumbing, 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
- New executive management team, led by Chris Maityard and Iain Bell, joined the company in conjunction with this investment
Acquisition of Stamco – June 2019
Group: 20 branches; c.£100m revenues; 440+ staff
Acquisition
Stamco (5 branches including central 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
