Albion Chemical Partners, a new firm dedicated to buyouts in the chemicals sector, has acquired Hays Chemicals from Hays for GBP107 million. Hays has retained a 49 per cent stake in the company, which will now be known as Albion Chemicals. The deal was financed with GBP60 million of senior debt provided by the Bank of Scotland, a vendor loan note and an equity portion provided by Hays and Albion.
Peter Savage of Albion said: “We believe that there is considerable potential to grow Hays Chemicals as an independent business. The group is extremely well positioned in its core markets and is now able to exploit the consolidation opportunities in the European chemical distribution market.”
Hays Chemicals distributes and manufactures chemicals, the deal includes all activities including chemical distribution, chlor-alkali manufacture and sulphuric acid and colours. The group, headquartered in Leeds, has a nationwide depot network and provides a range of chemical related products and services. Included in the new executive team are Steve Holland and Mark Day, both previously with Hays Chemicals.
Albion was set up last year to lead UK and European MBOs and MBIs in the chemicals sector. Together the three individuals behind Albion have 50 years experience in chemicals and 14 years experience in investment banking, with past experience of buyouts in the industry. They are Peter Savage, previously a board director of Inspec Group and a director of Exxon Chemicals, William Cortazzi, formerly a chemical engineer with ICI, Dalgety and Harris Chemical and Nigel Batchelor, an accountant with experience gained at Morgan Grenfell and Deutsche Bank.
Albion is hoping to take advantage of the rapid consolidation in the chemicals industry. Cortazzi says: “The values in the chemicals industry are good at the moment and we believe it has a good long term future.” The company does not have a set financing structure for buyouts, it will consider all sizes of business and aims to develop a chemicals group.
The typical size of deals the company is looking for is GBP100 million to GBP500 million, it does not intend to raise an independent fund but will finance future deals in partnership with other private equity funds.