KCP funds £3.8m MBO of Staffordshire plastics firm

BIRMINGHAM based private equity firm Key Capital Partners has helped finance a £3.8m Management Buy-Out of a Staffordshire plastics firm.

The MBO has also seen KCP take a significant minority stake in Stone based Wells Plastics.

The Birmingham office of Clearwater Corporate Finance provided corporate finance advice and deal management services to the new management team.

KCP was advised by Chris Heatlie at BDO (financial due diligence) and Gregg Davison and Andy Phillips at Pinsent Masons (legal). A team from the Birmingham office of Cobbetts provided legal advice to the management team, while the exiting shareholders were advised by Simon Woodings at Beswicks Solicitors.

Wells supplies additives to global plastic manufacturers and processors looking to modify the properties of a broad range of plastic and polymer products. This helps with UV resistance, flame retardancy and oxobiodegradability. The end products are then supplied to a variety of sectors, including consumer, automotive, construction and agriculture.

The company has achieved a sustainable 20% annual growth rate over recent years, driven largely by the growth in demand for its innovative oxobiodegradable product, Reverte™.

Reverte™ is designed to speed up the natural degradation process of plastic to produce water, carbon dioxide and biomass. Widely acknowledged as the most advanced product of its type in the market, it is used mainly in packaging, particularly for carrier bags and in agriculture, and can reduce the biodegrading time of plastics from centuries to years or even months.

The investment from KCP will enable Wells to exploit the major growth opportunity for Reverte™, with a particular focus on targeting the Middle East, Africa and South America, where rapid development is leading to increasing pressure on waste disposal management.

The company will also draw on the investment to market directly to consumers in order to increase awareness of the benefits of the product.

The KCP investment is alongside senior debt facilities from Natwest and a sizeable investment from incoming executive chairman, Paul Richardson.

Mr Richardson has joined sales and marketing director, Carl Birch, and technical director, Andrew Barclay, on the board of Wells. Former managing director, David Nelson, will retain a role at the company.

The investment by KCP was led by Birmingham-based partner, Owen Trotter, and North West partner, Andy Gregory.

Mr Trotter said: “The management team at Wells has consistently displayed great vision in terms of predicting and responding to the future needs of retailers, manufacturers and other end users of plastic products. Our investment will enable the company to expedite its growth strategy and to move increasingly into global markets.”

KCP, which also has offices in Cambridge, Leeds and London, specialises in investments of between £2 and £10m.