HISTORIC Fife timber merchant the Donaldson Group has sealed its biggest acquisition to date with a deal to take over the timber frame manufacturing business of Aberdeen’s Stewart Milne Group.

The deal for Stewart Milne Timber Systems (SMTS) marks the first move into the timber frame market by family-owned Donaldson, which can trace its roots back to 1860. All 411 employees of the Milne timber frame division will transfer to Donaldson, including directors Alex Goodfellow and Rod Allan, and its operations will remain unchanged.

Mr Goodfellow has been appointed chief executive of Donaldson's off-site manufacturing business.

SMTS, which was established in 1975, operates throughout the country from three manufacturing sites, in Aberdeen, Witney in Oxfordshire and a new facility in Falkirk.

Its acquisition by Donaldson comes after Stewart Milne Group revealed in August that it had put its £100 million turnover timber manufacturing division up for sale to focus on expanding its homes business across Scotland and north-west England.

The group said then that it was “capitalising on Stewart Milne Timber Systems’ position… by putting the business up for sale at a time when the market is set to grow exponentially”.

Donaldson, which has decades of experience in timber engineering and merchanting, described SMTS as a “natural fit”, and said the acquisition will allow it to offer a stronger timber package to customers in the residential and commercial sectors.

Andrew Donaldson, chief executive 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 Scottish-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.

“This is an exciting move for the Donaldson Group, as we venture into the timber frame market at a time when interest in the material has never been higher. The use of timber frame is anticipated to double in the next five years as housebuilders turn to modern methods of construction and renewable sources to achieve crucial net-zero carbon targets. This acquisition supports the Donaldson Group’s commitment to sustainability: building a sustainable business and supporting a sustainable industry.”

Stuart MacGregor, chief executive of Stewart Milne Group, said: “This deal represents an exceptional outcome for both parties. The scale of the opportunity in the growing timber frame market and the stellar growth of SMTS presented a highly compelling investment proposition and we are pleased to have found the right buyer who will continue to invest in the business and its people.

“The sale of SMTS will enable Stewart Milne Group to strengthen our investment in our thriving homes business which has seen record levels of sales in the last 18 months and, with our differentiated approach to place-making and new homes range, is now superbly positioned for future growth.”

The SMTS acquisition is the latest in a series of deals concluded by Donaldson in the last two years. It has acquired Kitchens International, Stonecare, Rowan Manufacturing, and Smith and Frater since the start of 2020.