3i has invested €30m in MKM Building Supplies,

The business, headquartered in Hull and operating primarily across the North East of England, is aiming to build on its successful track record and continue opening new branches in key growth areas.

Strong track record
Since being founded in 1995, MKM has achieved an impressive track record of growth. It is unique among builders merchants' in giving managers a 25% stake in their depots and handsome bonuses. This strategy has worked extremely well and has enabled MKM to increase profits faster than its competitors and recruit some of the best managers in the industry.

3i first invested €1.47m in the company in 1998 and approached the management team again in November 2005. Richard Bishop, Partner, 3i, explains: "We decided to target the business because it is a high quality organisation which has become one of the biggest players in the industry and its track record of profitability is second to none."

Attractive terms
During the negotiations with 3i, MKM was in talks with two other potential investors. 3i was able to secure the deal because it offered more attractive terms. The management team was also impressed by 3i's sector knowledge and ability to deliver quickly. The whole deal was completed in less than four months.

Further industry expertise will be provided by Chairman Stuart Rose, who was introduced by 3i to the board in March 2006. A former Deputy Chairman of Body Shop, Rose will use his retail knowledge to help MKM raise like-for-like sales across its depots. He will  also supervise the rollout of new depots across the country.

Stuart Rose stated: "MKM is a quality business which is already one of the leading independent builders' merchants in the  market. Because of its focus on service it is in a great position to leapfrog the other independents in the market and have a dominant position. I'm delighted that 3i is able to provide significant further investment to help the company achieve its growth potential."

Malcolm Walker, Founder, MKM Building Supplies, said: "MKM is a great business and I am delighted that 3i has committed further investment."