Our Member Firm Advises the Shareholders in a Sale of a Timber Company

Our Scottish member firm, Henderson Loggie have advised Rembrand shareholders regarding Cairngorm Capital’s acquisition of Rembrand Timber Limited. Cairngorm Capital’s is merging Rembrand with its existing portfolio company, Thornbridge.

Thornbridge and Rembrand are the two largest independent timber processing and distribution companies in Scotland, so this merger marks a key milestone in the growth strategy for both businesses. Together with NYTimber (acquired by Thornbridge in February 2018), they will create the leading independent timber distribution company in Scotland and the North of England. The group has 35 branches, 28 of which are in Scotland; revenues exceeding £100 million and over 600 employees.

Established in 1982 and headquartered in Dundee, Rembrand is an importer, manufacturer and distributor of timber. It has two manufacturing sites and 20 branches across Scotland, serving a broad range of customers in the construction industry. In addition to an extensive range of timber, sheet and joinery products, Rembrand offers a broad selection of roofing, insulation, and other building materials via its subsidiary companies, Scotia Roofing, Glow Insulation & Site Supplies and Rembrand Builders Merchants.

This is Cairngorm Capital’s 14th proprietary transaction since July 2016 and its third in the timber distribution sector. With minimal overlap of the branch networks, this acquisition is highly complementary and offers the strategic opportunity for geographic expansion and product range extension. The enlarged group now has an established distribution structure that extends from Thurso and Skye to Northallerton.

The acquisition was triggered by the retirement of George Low, Managing Director and sole owner of Rembrand, who will remain in the business for the short term to ensure an effective handover and a smooth transition. It also marks the decision by Bruce Muirhead, Thornbridge’s Managing Director to step back from the day to day running of the business and to continue his involvement in a non-executive capacity. Following Cairngorm Capital’s initial investment in Thornbridge eight months ago, Bruce committed to stay for a limited period to guide the business through its first phase of growth, which culminated in this transaction.

This transaction was led by Neil McGill, Investment Director and Head of Cairngorm Capital’s Edinburgh office, who said:

“As investors we are actively engaged in the strategy and operational development of our portfolio companies. We have been looking for further opportunities to continue the growth of our timber business. The complementary geographic fit between Rembrand’s and Thornbridge’s branches delivers immediate distribution advantages. We are delighted to be able to support this proprietary, off-market transaction as the next step in the creation of a leading UK timber distribution company. Further acquisitions are planned.”

George Low, Managing Director of Rembrand, said:

“I have long been an admirer of Thornbridge and all that it has achieved. We have much in common in terms of our heritage, our commitment to outstanding product quality and our belief in the highest standards of customer service. This, together with our highly complementary product ranges and distribution networks, makes the merger a good fit and will allow Rembrand to continue to thrive to the benefit of our customers and employees. I know I will be leaving the business in very capable hands and look forward to seeing it prosper.”

Rob Barclay, Group Chief Executive of Thornbridge, said:

“I am delighted to be joining Thornbridge and to be able to welcome Rembrand into the group. It is a pleasure to have such a well-respected company, with a strong market presence join the group. There is a clear fit between all the businesses and the combination creates many opportunities. The group is at a really exciting point in its development, with the ability to capitalise on numerous options for growth. Although we have ambitious goals to fulfil, with strong investor support, our exceptional products, first-rate employees and a well-deserved reputation for superior service, these are very achievable. I look forward to leading the next phase of development.”

Thornbridge and Cairngorm Capital were advised on this transaction by Johnston Carmichael (financial and tax), Addleshaw Goddard (legal), CIL (commercial) and JLT (insurance). Rembrand shareholders were advised by Henderson Loggie (financial and tax) and Blackadders (legal). PNC Business Credit provided bank facilities to support this transaction.