Eversheds Sutherland advises US group on first major UK acquisition

The Perstorp Warrington plant

A cross-border Eversheds Sutherland team has advised Ingevity Corporation on its £532.66m acquisition of Warrington-based chemicals company Perstorp UK Limited, the caprolactone division of the wider Perstop Group.

The transaction, which is subject to regulatory approval and expected to close by Spring 2019, is NYSE-listed Ingevity’s first major UK acquisition.

It will increase the company’s range of products and geographic reach, while offering the potential for significant business growth.

Headquartered in North Charleston, South Carolina, Ingevity operates from 25 locations around the world and employs 1,600 people.

Ingevity provides specialty chemicals and high-performance carbon materials and technologies that are used in a variety of demanding applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks and automotive components that reduce gasoline vapour emissions.

Perstorp UK operates the caprolactone division of the wider Perstorp Group. Caprolactone is used in the production of highly-specialised polymers.

Caprolactone is a global market leader in the production and commercialisation of caprolactone monomer and high-value downstream-related derivatives, including caprolactone polyols, caprolactone thermoplastics, caprolactone lactides, hexanediol (HDO) and other compounds.

In September last year Perstorp announced a significant investment to upgrade its Warrington plant.

The project started at the beginning of 2017 and the building of new plant parts began in early 2018. The build is expected to be completed in the second half of 2019.

The business has annual revenues of approximately £135.4m.

Jan Secher, president and chief executive of Perstorp, said: “We have a strong track record in delivering optimum value from our businesses.

“This sale realises the significant value of the asset, simplifies Perstorp Group, strengthens our balance sheet and allows us to focus our future investment and innovation in attractive high growth segments.

“Our strategy remains to leverage Perstorp’s superior positions and expertise in chemistry and engineering to drive innovation and provide our customers with solutions that advance everyday life.”

Michael Wilson, Ingevity president and chief executive, added: “The Capa business fits Ingevity’s strategy and financial profile and aligns with our business model and capabilities.

“Like our current businesses, Capa is a high value-added, specialty chemicals business driven by technology-based customer partnerships and focused on high-growth end-markets.

“In addition, Capa will increase Ingevity’s product and geographic diversity and offers the potential to grow in related strategically-targeted market segments.”

The Eversheds Sutherland corporate team was led by partners Nicola Brookes (UK) and Simon Masters (UK) alongside associate Charlotte Singh (UK).

Support was provided from the commercial, environmental, IP, employment and pensions, tax, real estate and banking teams, including partners Jonas Bratt (Sweden), Miriam Van Ee (Netherlands), and associates Douglas Dahlin (Sweden) and Laila Kouchi (Netherlands).

Partner Meltem Kodaman (US) and counsel Stephani Hildebrandt (US) provided advice on the US aspects of the transaction.

Eversheds Sutherland teams in Spain and Germany assisted competition partner Kate Newman (UK) and associate Todor Papanov (UK).

Nicola Brookes said: “We are delighted to have advised Ingevity on this major strategic acquisition in the UK.

“This is a significant opportunity for them to acquire a unique business with technology and state-of-the-art manufacturing capabilities which aligns well with Ingevity’s own strategic objectives for growth and expansion.

“We have thoroughly enjoyed working with the team and our international support network did a fantastic job demonstrating our capabilities on cross-border transactions of this nature.”

EY provided vendor due diligence support to Perstorp, led by Richard Harding, Stuart Thwaites and Lisa Bardsley.

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