£100m exit as Chinese tech company snaps up chemicals firm
A $2bn Chinese sciences company has acquired a chemicals firm from Manchester-based NorthEdge Capital.
The deal for Fine Chemicals, based in Middlesbrough North Yorkshire, is thought to be worth around £100m. NorthEdge acquired the company for £48m in 2013.
NorthEdge has agreed to sell the firm to Chinese listed life sciences business Lianhe Chemical Technology Company, better known as Lianhetech.
The Shenzhen company has a market capitalisation of around $2bn and revenues of $600bn. It was founded in 1985 and now has nine production sites and two R&D centres in China.
It is also acquiring Fine’s subsidiaries Fine Organics and Fine Environmental Services and it will become Lianhetech’s European division.
Fine has around 220 employees and manufactures products for the chemicals, pharmaceuticals and life sciences industries, operating from a site at Seal Sands in Middlesbrough.
The firm delivered a turnover of £52m and an EBITDA of £10m in the year to September 2016.
Chris Gowland, chief executive at Fine Industries, said: “Becoming part of the Lianhetech team is a very exciting opportunity for Fine Industries and we feel privileged that they have selected our business to be the platform for their European expansion strategy. The brand and reputation of both Lianhetech and Fine Industries are well known and respected in the chemical manufacturing industry and I expect the union of the companies to further strengthen our position in the global market.”
Maggie Wang, chief executive at Lianhetech, said: “The acquisition provides the geographic presence, capability and expertise needed to develop new products and better utilise Lianhetech’s state-of-the-art technologies for our customers worldwide. We expect Fine Industries Limited’s customer base, expertise and capabilities to strengthen our organisational offerings as a global solution provider.”
The original investment by NorthEdge in 2013 was led by partner and head of new business Ray Stenton, assisted by investment director Tom Rowley and has been managed by Ray, portfolio director Ben Wildsmith and investment manager, George Potts.
Ray Stenton, partner at NorthEdge Capital, said: “Fine Industries is a high quality UK based chemical research and manufacturing company with a highly skilled workforce. The business sells globally, it is an exceptionally well invested asset and a highly trusted partner by its customer base. These qualities along with the strength of the management team, make this an ideal platform for Lianhetech’s European expansion plans.
“As Lianhetech’s first investment outside of China, this represents a significant strategic development and sign of their future ambition.”
The transaction is subject to the usual regulatory approval conditions.
NorthEdge and Fine were advised by PwC and Addleshaw Goddard. Lianhetech was advised by EY and Travers Smith.
