Caledonian Building Systems

Caledonian Building Systems

Build up, build on, buy-out. Caledonian Building Systems Limited, the UK’s leading manufacturer of pre-engineered buildings, completed an MBO and two-stage exit within a three-year period.

Caledonian designs and provides multi-storey structures using steel modular systems - serving clients in the defence, hotel, education and residential sectors. By using pre-engineered modules, traditional construction times are significantly reduced and greater consistencies achieved in terms of costs and final build quality.

In 2003, company owner Phil Hinton (who had acquired Caledonian in a 1997 buy-out) approached Clearwater to explore potential exit options. Clearwater introduced Dunedin Capital Partners to the client and nine months later, Caledonian was acquired by an MBO, in a £37 million, Dunedin-backed transaction.

Clearwater maintained close links with Caledonian following the initial transaction. Originally acting for the vendors on the sale to Caledonian’s management team and Dunedin, Clearwater was subsequently appointed by the purchasers to advise on value maximisation through developing the group structure. In this role, proposals were put forward to divide the two main trading divisions – Caledonian Safemaker and Caledonian Building Systems – with a view to piecemeal disposal, which offered shareholders a higher rate of return.

The Caledonian Safemaker business was subsequently sold to Speedy Hire in February 2006. Champion Enterprises Inc, an American listed company, made its first European acquisition two months later with the purchase of Caledonian Building Systems. The disposals, for a combined sum of £76 million, represented a 5.8 money multiple for Dunedin in two-and-a-half years.

Dave Turnbull, who led the 2003 MBO, has stayed with the business since Champion’s takeover. With the US parent’s backing and continued support from the rest of the MBO team, Turnbull is guiding Caledonian through its next phase of development.

As the leading player in a rapidly-growing market, Caledonian is well-placed to expand further, organically and/or through strategic acquisition.

Turnbull commented:

“Clearwater have worked extremely well with us over a number of years and have really become part of the Caledonian team. Their support and advice combined with good market knowledge has helped at each stage of the evolution of our business, allowing us to make the right funding decisions at the right time and enabling Caledonian to achieve its growth aspirations.”