New specialist investor targets chemicals sector

06 August 2001

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Albion Chemical Partners (ACP) was established last year with a specific investment focus of supporting management buyouts and buy-ins in the chemicals sector. The firm has just announced its first investment, supporting the management buyout of Hays Chemicals from Hays plc. ACP was formed by three individuals with experience of both the chemical industry and private equity investing. Peter Savage and William Cortazzi have 50 years industry experience between them, having worked variously at Inspec Group, Harrison & Crosfield, ICI and Dalgety. They were joined by Nigel Batchelor, who comes from an accounting background and has 14 years of investment banking experience gained at Morgan Grenfell and Deutsche Bank.

ACP was established to exploit the potential for consolidation in the European chemicals industry. Cortazzi reports that there are currently many opportunities to buy good quality businesses at sensible prices. However, investment in this sector often requires a greater degree of knowledge of the chemicals industry than is possessed by many investors, which is where ACP feels that its expertise can be invaluable in sourcing deals and managing companies post-investment. ACP invests from its own balance sheet rather than from an external fund and, according to Cortazzi, has no plans to go down the fundraising route, preferring to concentrate instead on investing. The firm has developed a strong relationship with Candover, through which it expects to source many future deals. Cortazzi also mentions that ACP will be looking for co-investment opportunities alongside other equity investors. ACP will be flexible as regards the financing of transactions and has no set rules for the debt:equity ratio or structure of the deal and will consider investing in chemical businesses of all sizes; however, typical deal size is expected to fall in the Â£100m to Â£500m bracket. A distinguishing feature of the ACP approach is the level of the firmâ€™s involvement with the investee company. By being selective with deals, ACPâ€™s principals aim to be able to participate fully in the firmâ€™s portfolio companies, taking executive board positions and providing a high level of management advice and guidance.