Palgrave Brown swaps AMJPE owners

Funds managed by Aberdeen Murray Johnstone Private Equity (AMJPE) have acquired UK joinery business Palgrave Brown in an unusual secondary buyout where the vendors were also funds managed by AMJPE. The deal values the company, which manufacturers roof trusses, timber windows, MDF mouldings and other high performance joinery products, at £30 million. The funds acquiring the business were not disclosed.

Palgrave Brown was formed when AMJPE invested in the management buyout of the timber manufacturing business of the Meyer Group in 1998. The £10 million deal included The National Roof Truss Company, Alfred Hulme, an MDF moulding manufacturer and Palgrave Brown Timber and Fireproofing. Participating funds were Murray VCT, Murray VCT 2 and Murray VCT 3. The deal was supported with debt from Barclays, which has also financed the second buyout.

The company, whose customers are national house builders, builders’ merchants and housing associations, has increased its turnover from £25million in 1998/99 to £54.4 million in 2002. Palgrave Brown undertook an aggressive growth programme, acquiring five other businesses to increase its network of sites from 11 to 19, now employing some 750 people.

Richard Fawcett, the former chief executive of builders merchant Jewson, led the original buyout team but is now handing over control to a team led by Keith Rutherford, who has been involved with the business for 31 years. Paul Newton, head of AMJPE’s Manchester office, said: “When it became clear that Richard wished to exit and other members of the management team wanted to stay on for the next phase of consolidation and growth my investment team started considering the idea of backing a secondary buyout.”

Other existing members of the management, including finance director Neil Ward, will be reinvesting and three further members of the management team will become shareholders. Kevin Martin will join the board with responsibility for the joinery division and Chris Myatt will continue as non-executive chairman. Rutherford, now managing director of Palgrave Brown, said: “Whilst we will be backed by different funds, we are very excited at the prospect of working closely with AMJPE again to further the growth and value of the business.”

The vendor was advised by Ernst & Young and DLA, with KPMG and Addleshaw Booth advising AMJPE on the purchase. Cobbetts provided legal advice to the management team. Ernst & Young’s Transaction Tax team also provided tax advice to the acquirers.