Graphite embarks on timber buy-and-build

UK private equity firm Graphite Capital has again backed the team which helped it receive 6 times its investment on LS Group in 2005 by acquiring a timber window maker called Performance Window Group. The firm hopes to use the investment to fund future add-ons within the building materials sector.

Graphite Capital has launched a buy-and-build strategy with the acquisition of a timber window maker Performance Window Group (PWG). Financial terms were not disclosed.

PWG is managed by Roy Wakeman and Mark de Rozarieux, a team that Graphite backed 10 years ago during the management buyout of door maker Leaderflush & Shapland Group (LS Group). This transaction achieved a return of 6.1 times the initial £12.5 million (€14 million ;$18 million) investment made in 1999 when LS Group was sold in June 2005 for £47 million to a building materials supplier called SIG.

Wakeman formed PWG in 2006 and acquired another UK timber company called Mumford & Wood as an add-on investment later that year. The firm achieved sales of £10.6 million in 2008, according to a press statement.

PWG plans to use Graphite’s investment to part-fund the acquisition of an online distributer of timber windows called TimberWindows.com. The firm also said that it expects a growth in the demand for timber products driven by the popularity of period property restoration and also a preference for timber building products as a “green” alternative to other materials.

“The market for timber materials is growing as people have become more environmentally conscious. [PWG] is ideally placed to exploit this,” Mark Golser, a Graphite senior partner, said in a statement. Golser and another senior partner, Andy Gray, led the transaction for Graphite.

This is not the first time Graphite has backed a team with which it has a longstanding relationship. In October last year it committed £53 million to a healthcare project called Willowbrook Healthcare, which was being managed by team it had backed twice previously; John Strowbridge, Ian Matthews and Roger Storey, who were involved in the buyouts of Optimum Care and Avery Healthcare.

Graphite manages more than £1.1 billion through three private funds and the publicly quoted Graphite Enterprise Trust. PWG is the fourth investment made by its latest fund, Graphite Capital Partners VII, which closed on £555 million in May 2007.