3i’s 2006 investment, which was partially syndicated to LDC, has supported founder David Kilburn with the firm’s growth plans. The management also has a significant shareholding in the business, which is retained.
Since 2006, revenues and profits have more than trebled. During this time, the business has also developed from a regional to a national player, expanding to 47 branches across the country. Revenues topped £284m in 2016.
MKM founder and executive chairman David Kilburn 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.”
Bain Capital Private Equity principal Matthias Boyer Chammard said: “We were attracted to MKM’s best-in-class customer service, underpinned by its unique business model, which has enabled the firm to significantly outperform the market. 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.”
Bain is paying 3i £70m for its share of the business. Including £11m received by 3i since 2006, it has made a 5.9x return on investment.
The transaction is subject to customary regulatory approvals. Subject to these approvals, the transaction is expected to complete by May 2017.