In another move supported by further investment from Cairngorm Capital Partners LLP, Arnold Laver & Co and The National Timber Group have announced their merger, creating what is said to be the “largest independent timber distribution business in the UK”. With combined revenue approaching £250 million, the enlarged Group has 52 distribution and processing sites extending from the north of Scotland to London and the South West and over 1,300 employees.
The National Timber Group is described as a “collective of market-leading added-value timber distribution companies”, which include Thornbridge Sawmills, North Yorkshire Timber and Rembrand. The move is the latest in a series of deals within the merchant sector involving private equity investment.
Headquartered in Sheffield, Arnold Laver is the timber division of Arnold Laver Holdings Limited, a family-run company first established in 1920. It imports, distributes and manufactures a wide range of timber, panels, decorative surfaces and joinery products, serving public and private sector construction, house-building and commercial companies. Its customers include blue chip construction companies and it is a favoured timber supplier for major infrastructure projects that include the 2012 Olympics, Hinkley Point Power Station, HS2 and the Thames Tideway.
With its annual turnover in excess of £130 million, it has 13 strategically located distribution and processing depots across the UK, providing national coverage; a national production centre at Mosborough near Sheffield and a highly skilled and experienced workforce of over 750 employees.
With “minimal overlap of the branch networks”, this partnership is described as “highly complementary and marks a key milestone in the growth strategy for both businesses, advancing their collective objective to consolidate the UK value added timber distribution sector, expand geographically and provides the platform for further growth”.
The enlarged Group will be led by Rob Barclay, Group Chief Executive, who joined The National Timber Group in June. The Group will have three divisions: a Scottish division – comprising the operations of regional brands, Thornbridge and Rembrand – that is headquarted in Grangemouth and led by Alex McLeod, who joined the Group as Managing Director, Scotland, in September; one headquartered in Sheffield led by the Arnold Laver management team and a third headquartered in Northallerton and led by Nick Kershaw, Managing Director which encompasses the North Yorkshire Timber brand.
With strong, highly trusted regional brands, each of the underlying companies will retain their trading names.
The merger was prompted by shareholders’ decision to focus on their existing property and leisure interests. Owners Andrew Laver and Mark Bower will remain in the business to ensure an effective handover and a smooth transition.
Rob Barclay, Group Chief Executive of The National Timber Group, said: “We are delighted to partner with Arnold Laver and welcome them to the Group. The merger is highly complementary – together, we are able extend our presence nationwide, pursue further growth and are well positioned to capitalise on the market leading position we have established. Additionally, our values, vision and commitment to customers are completely aligned, which creates exciting opportunities for us both.”
This transaction was led by Neil McGill, Investment Director at Cairngorm Capital. He added: “The UK timber market remains highly fragmented and offers many opportunities for well-organised, high quality businesses such as The National Timber Group and Arnold Laver. As investors, we have been working hard to find opportunities to scale our timber interests rapidly so we are delighted to be able to support this partnership. We believe we now have a great platform for further growth under the leadership of an exceptional management team.”
Andrew Laver said: “Once we had taken to decision to consolidate our interests, our priority was to find a partner with shared goals and values who would help our timber business to fulfil its potential. Both companies have much in common in terms of heritage, outstanding product quality and a commitment to the highest standards of customer service, which makes this merger a very good fit. I am confident that the business is in very capable hands and that it will continue to thrive and prosper.”
Cairngorm Capital funded the takeover of Parker Building Supplies earlier in the year and the Arnold Laver deal is the latest in a growing number of VC / private equity investment in the merchant sector.