Ares and Farallon eye control of builders’ merchant IBMG
Lenders to one of Britain’s biggest networks of builders’ merchants are angling to take control of the company amid talks with its private equity backer over new funding requirements.
Sky News has learnt that Ares Management Corporation and Farallon Capital Europe, two major investment firms, could move to take ownership of Independent Builders Merchant Group (IBMG) in the coming weeks.
City sources said on Tuesday that a deal for Ares and Farallon to take over IBMG was likely to be implemented through a restructuring of the company’s debt, rather than any form of insolvency event.
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Interpath Advisory is working with IBMG on the process, according to the sources.
IBMG was founded with financial backing from Cairngorm Capital, a private equity firm, in 2018, and has grown since then through more than 20 acquisitions.
According to Cairngorm’s website – where IBMG is listed as a ‘realised investment’, which a spokesperson for the firm said was “in error” – IBMG now has more than 170 branches across the south of England.
It employs more than 2,000 people and recorded revenues of approximately £650m in its latest financial year.
IBMG operates through several divisions, including plumbing and heating, roofing and timber processing and distribution.
The company announced in April 2024 that it had secured new capital from Ares and Farallon but said at the time that this would be with “the continued support of Cairngorm Capital”.
Cairngorm Capital said: “Interpath has been appointed by IBMG’s shareholders to work on appropriate cost reduction initiatives, necessitated by the difficult cost environment that IBMG is operating in.
“Cairngorm Capital remains a majority shareholder although it has realised some of its investment.”
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Ares, Farallon and Interpath declined to comment.