Banks in £104m club deal for chemicals maker

NORTH West chemicals manufacturer Innospec has revealed a £104m ($150m) refinancing deal with five major banks.

The American-owned company which has its UK headquarters at Ellesmere Port, specialises in making fuel additives, which are increasingly in demand as vehicle manufacturers look to improve fuel efficiency and cut CO2 emissions.

The North West offices of Barclays Commercial Bank, Royal Bank of Scotland, and Yorkshire Bank were involved along with London-based counterparts from Credit Suisse and Lloyds Banking Group.

This transaction is a sign that the appetite may be returning for large deals, albeit with the risk shared across a number of institutions.

Innospec, which employs almost 400 people in the UK will use the new money to refinance its existing debt and provide additional working capital.

As well as fuel additives its active chemicals business supplies the personal care; household, industrial and institutional and fragrance ingredients markets.

Globally, the company employs almost 1,000 people in 23 countries.

Kevin Rimmer, director with Yorkshire Bank’s corporate and structured finance
team in Manchester, said: “Over the past few years Innospec’s management team has succeeded in switching the focus of the business away from the declining leaded petrol additives market and transforming it into a global speciality chemical company.

“It is now in a strong position to continue its expansion through both organic growth and acquisitions. We are delighted to continue our strong relationship with the company during its next stage of growth.”

Alan Brown, relationship director at Barclays Commercial Bank in Manchester commented:  “The latest deal will facilitate the continuing strong pace of development within the group’s exciting fuel specialties and active chemical propositions. 

“Environmental regulation is Innospec’s best friend and the group is well placed to benefit from the global push towards a cleaner atmosphere.”  

Chris Sharkey, relationship director at RBS, added: “The funding structure that has been put in place provides Innospec with the platform to continue the growth and success they have achieved over many years. 

“The management team impressed us with their future plans and we look forward to watching their progress.”