Welsh chemical group in MBO
Article Date: Sep 02 2008Warwick International, a chemical group based in North Wales, has undergone a management buy-out (MBO) led by private equity and venture capital firm Close Brothers. The deal, worth £129 million, was financed by the big four banks in a syndicate led by Royal Bank of Scotland (RBS).
Close invested £55 million in the MBO, with the balance supplied by the banks in the forms of senior debt, mezzanine and working capital facilities.
The deal sees Close and Warwick’s management team acquire the entire share capital of the business from US-based parent Sequa Corporation. CEO Bob Ellis led the MBO, and will be joined on the board by Mathew Hutchinson, investment director at Close.
Says Hutchinson: ‘Warwick is a high quality company which came onto our radar as an orphaned chemical asset within a large American engineering group.’
The company will pursue a strategy of continuing expansion through organic growth and bolt-on acquisitions such as the recently announced purchase of Malaysian chemical distributor GME.
Accountancy firm Deloitte advised Close Brothers, and Clearwater Corporate Finance advised the management team. Hammond provided legal advice to RBS with DLA acting for Close.
Warwick was established in 1979 and consists of two separate businesses, a manufacturer of chemicals used in laundry detergents and a network of niche chemical distributors based across Europe and Asia. The company’s turnover is more than £180 million.
