MKM Building Supplies, 3i Group Plc, LDC and Bain Capital Private Equity Signed an Agreement

MKM Building Supplies, 3i Group Plc, LDC and Bain Capital Private Equity Signed an Agreement

It has been announced that MKM Building Supplies, 3i Group plc, LDC and Bain Capital Private Equity have signed to agree the sale of 3i and LDC’s stakes in MKM. MKM is the largest independent builders’ merchant in the UK. Despite the sale, management will retain a significant shareholding in the business.

3i originally invested in MKM in 2006. This investment was partly syndicated to LDC. These investments have provided support for the founder David Kilburn and the firms growth plans. The ambitious growth from the above 2006 investment has led to the company’s revenue and profits to more than triple. The size of the company has also expanded. MKM has also expanded from a regional to a national competitor in the builders’ merchant industry. MKM now has 47 branches across the country. The business is consistent in its improvement, and is also consistently listed with a like-for-like sales growth above its industry peers.

MKM have had their most successful year in 2016 with £284.3 million of revenues and £22.4 million of EBITDA. The growth of this business is underlined by a particular model which allows its Branch Directors to own an equity stake in their branch. MKM also employ over 1,100 people.

MKM WAS first established in Hull in 1995. The company founders were David Kilburn and Peter Murray. David Kilburn remains the Executive Chairman of MKM. The business is looking to develop further with the support of their new investor Bain Capital. The sector is expected to grow to an estimated £13 billion by 2020, and MKM will be hoping to be part of that growth.

The unique business model has allowed the business to outperform their competitors as well as providing incentive to their management.

This transaction is still subject to customary regulatory approval. The official sale is set to be completed by May 2017.


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