CMO Group
CMO is the UK’s largest online-only retailer of building materials. The company provides the convenience of online retail, with a vast range of products available to customers delivered direct to home or to builders on-site whilst supported by a market leading customer service offering.
The Key team brought a wealth of retail and e-commerce experience alongside their understanding of working with high growth businesses. They remain a supportive investment partner as our business continues to grow.
Working with CMO...
Investment process
CMO was founded in 2009 and set out to disrupt the building products market by creating one of the first pureplay online operators in the market. The business provides an unparalleled product range at competitive prices and supported by market leading customer service. The business grew rapidly from inception and the founding shareholders had stepped back from the day-to-day operations. We supported the management buyout of cmostores in May 2017 with an £8.7 million investment.
Growth process
Following our investment we supplemented the existing management team, introducing new and complimentary skills. Additions to the team included a non-executive chair, CEO and CFO. We subsequently supported the team through the development of a five-year strategic plan. During our investment period the business launched several new websites and completed three complimentary bolt-on acquisitions. Between 2017 to 2021 sales increased by over 320% and profitability doubled. Significant investment in people, systems and infrastructure (IT and premises) was required to deliver this growth, with overheads increasing by over 400% during the same period.
Exit process
The CMO board worked with a corporate finance advisor and specialist AIM broker over a three-year period as part of an ongoing assessment of the optimal exit strategy. The board concluded that an IPO would deliver the best result for shareholders whilst supporting the company’s ambitious growth plans. CMO successfully listed on AIM in July 2021 at a market capitalisation of £95m. We returned 3.3x to our investors on float and retained a 26.8% shareholding in the company post float, worth a further 2.9x return to our investors based on the float price.