MKM Building Supplies, 3i Group, LDC and Bain Capital Private Equity have announced a binding agreement for the sale of 3i and LDC’s stakes in MKM to Bain Capital. Management will retain a significant shareholding in the business.
3i’s 2006 investment, which was partially syndicated to LDC, has supported founder David Kilburn with the firm’s ambitious growth plans. Since then, the business has also developed from a regional to a national player, expanding to 47 branches across the country. The business has grown like-for-like sales through service and category expansion, generating revenues in excess of £284m in 2016 and employing over 1,100 people.
David Kilburn, founder and executive chairman of MKM, said: “MKM has enjoyed exceptional growth over the past 21 years and I would like to thank 3i and LDC for their long-term backing and support. We are looking forward to working with Bain Capital for the next stage in MKM’s development. The UK builders’ merchant market is anticipated to grow to £13bn by 2020 and we expect to expand our UK branch network significantly.”
Proceeds to 3i from today's transaction will be around £70m. The transaction is subject to customary regulatory approvals. Subject to these approvals, the transaction is expected to complete by May 2017.
Matthias Boyer Chammard, principal at Bain Capital Private Equity, said: “Bain Capital has a strong track record of applying its expertise in the building materials and construction sectors to successfully grow companies, including Ibstock in the UK. We are delighted to have the opportunity to partner with the MKM management team to further expand the business throughout the UK.”