Stewart Milne divests Timber Systems business to Donaldson Group

Arrowpoint Advisory has advised Stewart Milne Group on the divestment of Stewart Milne Timber Systems, the UK’s leading timber frame manufacturer, to the Donaldson Group, a timber and building products specialist, operating throughout the UK.

Stewart Milne Group (“SMG”) was founded in 1975 and is one of the UK’s largest independent housebuilders with offices in Aberdeen, Edinburgh, Glasgow and Manchester and 20+ active sites UK-wide. SMG will now focus on investing in additional sites for its Homes Division, using their considerable land buying experience to take advantage of development opportunities.

Stewart Milne Timber Systems (“SMTS”), was established as the timber frame arm of SMG. SMTS is the UK’s largest timber offsite provider and is a pioneer in timber frame technology and manufacturing, operating throughout the country from three manufacturing plants in Aberdeen, Witney and Falkirk. SMTS has grown rapidly in recent years, with timber frame use in UK construction expected to double in the next five years to meet government housing targets and meet sustainability targets.

The Donaldson Group has been operating in Fife for over 160 years, and over time has grown strongly across the UK through innovation, acquisition, and investment in key businesses that complement the Group's current capabilities. The 11 businesses that make up the Group trade and operate independently and are market leaders in their respective fields of timber engineering, saw-milling and distribution, merchanting, roofing and cladding distribution, and laminate manufacturing.

The acquisition strategically and operationally complements the Donaldson Group portfolio, allowing the Group to offer a stronger timber package for residential and commercial applications to all current and future customers, and further supports Donaldson Group’s growth strategy, following the additions of Kitchens International, Stonecare, Rowan Manufacturing and Smith and Frater since the start of 2020. All staff and operations will continue unchanged, and Donaldson Group is committed to the Board’s growth plans and supporting SMTS in achieving its ambitions.

Alex Goodfellow Group Managing Director of SMTS and now CEO of Donaldson Offsite commented: “I would like to thank the team at Arrowpoint Advisory for their support in helping SMTS to find the right partners for the next stage in our growth journey. They were with us every step of the way and were always committed to getting the deal across the line and achieve a successful outcome.”

Andrew Donaldson, CEO of the Donaldson Group said: “We’re delighted and proud to have successfully acquired this terrific timber frame business. This deal secures the future for a leading UK-based business; enabling the growth plans for it to reach its full potential, while providing reliability and stability for its existing and new customers. SMTS is a natural fit for the Donaldson Group; it offers a similar family-owned ethos and has a strong reputation and track record for investment and innovation. We’re pleased to welcome all 411 employees to our family business and look forward to working closely with Alex and the full team.”

Tom Smith, Director at Arrowpoint Advisory, concluded: “We’re delighted to have been able to support Stewart Milne Group on this divestment – the transaction helps continue Rothschild & Co’s strong track record in building products and corporate divestments. We look forward to watching SMTS prosper under its new ownership and I am sure that the Donaldson Group will prove to be an excellent home for the business.”

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