Yorkshire team contributes to £20m boost for chemicals firm

A TEAM from the Royal Bank of Scotland (RBS) in Leeds is pumping £10m into a chemicals firm which has its sights set on growing revenue to more than £100m by 2020.

The funding for Chemoxy has been matched by a £10m capital investment from the Business Growth Fund.

Chemoxy is one of the UK’s leading contract chemical manufacturers, operating from two sites in Teesside. It provides specialised manufacturing services to a range of large blue chip companies in the chemical and oil and gas industry.

It has also developed its own portfolio of low-toxicity solvents – including its successful Coasol range – used in environmentally friendly paints, industrial coatings and cleaning products.

The business has experienced rapid growth since it was acquired from Dow Chemicals in 2011 in an MBO led by chief executive Ian Stark and chief operating officer Martyn Bainbridge, increasing turnover from £34m to around £50m.

To date, the team has invested more than £10m in new plant and acquired new land at its Billingham site in preparation for future growth.

The business will use the new funding package to make further investments in capital and plant over the next four years in order to increase capacity, expand its product and service range and drive growth. Chemoxy’s management team has an ambition to grow revenue to in excess of £100m by 2020.

BGF, an investor in growing companies, has backed 26 British manufacturing businesses in the past three years, including VTL Group in Huddersfield. Last month, VTL received further funding to commence an eight year project to supply engine components to Jaguar Land Rover.

Andy Killingback, director, RBS complex transaction execution in the North, said: “Chemoxy is a high regarded customer of RBS and having supported management with the 2011 MBO, we are delighted to provide this funding package, alongside the investment from BGF, which will enable the business to further consolidate its position as the UK’s leading contract chemical manufacturer.’’

Ian Stark, Chief Executive, Chemoxy, added: “This funding package supports our long-term ambitions for Chemoxy, with growth capital empowering us to expand the business without relinquishing control over the management or direction of the firm. At the same time, we are looking forward to drawing on new ideas and expertise.”

The investment was led for BGF by David Colclough and Barry Jackson.

The advisers to the transaction were:

For Chemoxy

UNW (Paul Kaiser, John Healey)

Bond Dickinson (Nigel Williams)

For BGF

Ward Hadaway (Martin Hulls)

PwC (Nigel Ward, Kevin Barnard)