Breaking free, doubling profits and reducing emissions intensity – just some of the achievements of Marley during its Inflexion partnership. Paul Lester CBE, who chairs an impressive array of public and privately owned businesses, was Chair of Marley for the last two years and talks about taking the company from good to great.

It’s amazing what can be achieved with the right materials. In a short space of time, Marley Group, the leading UK manufacturer of pitched roof systems to the construction market, went from captive subsidiary to a standalone and standout success. It wasn’t down to luck, but rather a thoughtful mixture of ambition, vision and graft which saw the business nearly double EBITDA in under three years since leaving its former parent Etex in August 2019.

Its independence day was supported by a substantial investment from Inflexion, which had undertaken a number of carve-outs before and so knew that careful negotiation and planning would be needed to make it work. The business was good, but its systems were tied into the parent and as non-core to Belgium-based Etex, true investment into Marley was lacking.

“The opportunity to invest in a separate enterprise system was fantastic. Additionally, the management team was fully supported, had the infrastructure to do bolt-on acquisitions, and was very enthusiastic. The management felt reinvigorated to really grow the business,” enthuses Paul.

This momentum formed part of the blueprint from which Marley would launch its building plans. Another crucial part was Inflexion’s experience in the carve-out space, meaning it was well placed to support management in the task which included setting up an independent IT system. They also invested in a new digital platform, a key enabler for customers to self-serve. New processing automation was launched, with the upgraded platform enabling clients to see their orders and track deliveries, and it stabilised peaks and troughs for Marley. It meant the staff could be redeployed into more value-adding roles where the value of a personal customer interaction can be leveraged.

Good to great – and a bit of green

As these changes were underway, housebuilding started booming as the pandemic saw people inspired to improve their living spaces, giving a good company further opportunity to be great. Says Paul, “It has since carried on at a very strong pace and still is even as interest rates creep up.”

The management team, as capable as it was ambitious, had M&A in its sights, and Inflexion had put sufficient equity in the business to maintain headroom to enable such investment. “We were keen to look at solar,” Paul recalls, citing multiple reasons for this. “There was a defensive reason for it since solar can replace other tiles. But a more major impetus is that solar will be one of the dominant sources of alternative energy in the UK. Additionally, it’d bring further environmental sustainability to Marley, which would bring a very strong bias to the business for prospective buyers down the line, whether trade, pension funds or other private equity. It really ticked all the boxes and, crucially, was strategic,” Paul explains.

In April 2021 Marley acquired Viridian Solar, a business it had struck a commercial partnership with a year prior to supply its tiles. Management identified the opportunity and then approached the firm with Inflexion, who was instrumental in suggesting how the deal could work. “It was done before Viridian went fully to market, so the timing was good and Inflexion helped Marley to put its best foot forward. Management did a stellar job of working closely with Inflexion to get Viridian over the line.”

Investing for growth

“The acquisition combined with a substantial investment into another production line, the IT system and revamping a building were all possible because Inflexion were prepared to invest heavily into the business,” Paul says, adding that his own appointment and that of an experienced CFO highlight the importance Inflexion places on investment in experienced people.

A keen eye was also placed on ESG. Marley was already a frontrunner in its sector, having been the first UK construction materials provider to achieve ISO 14001 environmental compliance in 2001. Clear objectives and targets built up around carbon reduction and equality around the workforce were a focus, and in 2021 Marley announced it was sourcing 100% renewable electricity – bringing down by a third its carbon emissions intensity during its Inflexion partnership.

“Some people don’t understand, especially if they’ve never been in a private equity environment and only hear the bad things, that you can truly get great support from PE and they can be great fun to work with. There was a completely open dialogue and it’s a real pleasure to work in that environment.”

Marley’s strong performance attracted significant inbound interest, with Marshalls proactively approaching Inflexion about a purchase and no formal sales process taking place. “Management beautifully showcased the opportunities going forward and responded to DD questions from the Marshalls team with support from Inflexion, all while continuing to run the Marley business brilliantly. It was a complicated deal to get over the line involving borrowings and new shares issuance by the buyer, but ultimately Inflexion achieved a fantastic result for all involved.”

Paul calls the growth a real team effort, with an excellent and motivated management team and experienced private equity investor who were all aligned:

“Inflexion spotted the opportunity and brought more than just funding. They supported the separation of the business and subsequent required investment and were a really good sounding board to make the right decisions. Inflexion had just the right experience. An outstanding team on both sides and the right infrastructure all came together and executed well so the firm could grow.”