Dunedin leads £37m Caledonian buyout

Private equity firm Dunedin Capital Partners has led the £37m management buyout of Caledonian Building Systems, a UK market leader in the modular construction industry.

Dunedin Capital Partners has led a £37m management buyout of Caledonian Building Systems, which will enable further expansion of the firm’s manufacturing capacity.

Caledonian designs, manufactures and constructs permanent buildings using pre-engineered, steel-framed modules assembled at a specialist facility in Newark, Nottinghamshire. It claims that its structures are equivalent to traditional concrete and steel construction with the advantage of half the build time and reduced site disruption. The firm is also a leading provider of secure portable accommodation for hire or sale under the Safemaker brand, which operates from five depots around the UK.

Caledonian was formed in 1997, initially to provide modular building solutions for prison accommodation. Since then it has broadened its customer base to include the Ministry of Defence, hotels, and the education and healthcare sectors.

The off-site construction sector is forecast to see growth of 46 per cent in the UK between 2003 and 2007, according to MSI Marketing Research. Caledonian employs 230 staff and turnover this year is expected to exceed £65m, with contract values averaging £3m.

The management team is led by managing director David Turnbull and finance director Kevin Wheat. Founders Philip Hinton and Gavin Hutchinson will retain a financial interest post-MBO and will have ‘a continuing involvement’.

“Caledonian’s design and construction expertise makes it a leader in its field with many exciting market opportunities open to the business,” said Turnbull. “Investment in additional manufacturing capacity is planned.”

Dunedin Capital Partners has a total of nearly £200m under management in its publicly quoted Dunedin Enterprise Trust and its Dunedin Buyout Fund LP, which closed on £54m in December 2002 and invests alongside the Enterprise Investment Trust.