NorthEdge Capital has agreed a sale of its chemicals’ manufacturer Fine Industries Limited to Chinese-listed life sciences company Lianhe Chemical Technology Company Limited (“Lianhetech”). The Shenzhen-listed company is China’s leading chemical contract manufacturer, with a market cap of approx. USD 2bn and revenues in excess of USD 600m across seven chemical production sites, two machinery production sites and two R&D centres in China.
Based in Middlesbrough, Fine Industries will become Lianhetech’s European base, allowing the organisation to operate in closer proximity to its customers and markets in Crop Protection, Pharma and Performance Chemicals. The transaction also extends the business’ portfolio of product development services and manufacturing solutions.
With around 220 employees, the Fine Industries Group is a leading contract manufacturer of high-quality products and solutions used in the chemical and life sciences industries. It operates an FDA inspected and approved site at Seal Sands, Middlesbrough. The Fine Industries Group develops and manufactures complex intermediates and actives for its agrochemical and pharma clients, as well as a broad portfolio of solutions for the speciality chemicals market. The firm delivered a turnover of £52m and an EBITDA of £10m in the year to September 2016.
NorthEdge originally invested in Fine Industries in November 2013. The investment 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. NorthEdge operates from offices in Birmingham, Leeds and Manchester with £525m of funds under management, and is currently investing from NorthEdge Capital Fund II which closed in March 2016.
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.”
Chris Gowland, CEO at Fine Industries, commented: “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, CEO 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 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.
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