INDEPENDENT building materials distributor, Independent Builders Merchant Group (IBMG), has raised additional capital investment.

Supplying southern England, IBMG secured the new funding with the support of its private equity owner, Cairngorm Capital Partners.

The investment comes from funds managed or advised by investment firms Ares Management Corporation and Farallon Capital Europe LLP.

The company says the additional resources will create a solid platform for continued growth, new market entry and further M&A activity.

IBMG’s latest reported revenue is £620m in 2022 from parent company Turbo Acquisitions 10 Topco Ltd. The same accounts show a pre-tax loss of £41m. At the end of 2023 the business completed a refinance of its term loan and banking facilities.

The company currently has 182 branches. IBMG’s business model is to recruit locally established merchanting brands with loyal customers. It combines this with an integrated centralised infrastructure achieving economies of scale.

Despite a challenging market in 2023, IBMG gained market share and growth in its active customer base.

Initiatives during the year were to consolidate supplier partnerships, along with investments in people and pricing. IBMG added to its product mix and competitiveness while navigating volume and deflationary pressures, the company says.

Capital Investment for Growth

The continued support of Cairngorm Capital and backing from new partners, Ares and Farallon, will help accelerate current initiatives, the company says.

During 2024, IBMG will be launching a new Renewables and Sustainability. It also plans to expand its independent network through new merchant branches and acquisition strategy.

Martin Stables, IBMG’s CEO, said: “The IBMG business model is special and unique in the sector. With five specialist divisions we can take any project from the ground to the roof ridge and ensure it’s supplied via an optimised supply chain minimising the miles travelled, ensuring efficient delivery for the specialised trades on site, without the need for multiple suppliers and the complexity and delays that can cause.

“Our focus remains the ‘repair, maintenance and improvement’ trade customer where we will continue to enhance our product and service offerings.

“The new funding partnership delivers additional capital for growth, providing IBMG with greater financial flexibility, allowing for continued investment. Looking to the second half of this year and beyond, medium-term macroeconomics look very favourable for our sector. Thanks to the extraordinary hard work by our teams, along with all our partners and stakeholders, we are well placed to deliver on the IBMG vision for even greater success.”

Andrew Steel, Cairngorm Capital Managing Partner, adds “Despite the economic uncertainty of the last 12 months, IBMG’s investment thesis has been strong and continues to meet all our objectives. IBMG has achieved sustained success since our initial acquisition in 2018, becoming the largest independent building supplies merchant in Southern England in under four years. This partnership will maintain its strategic trajectory. We are delighted to welcome Ares and Farallon as we embark on the next chapter of growth for IBMG.”

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