NorthEdge sells Fine Industries to Lianhetech in £103m deal

Kenny Wastell
27 February 2017

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North-of-England-focused GP NorthEdge Capital has sold speciality chemicals company Fine Industries to Chinese trade buyer Lianhe Chemical Technology Company (Lianhetech) in a deal valuing the business at ТЃ103m.

Following the deal, which marks an exit for NorthEdge's 2013-vintage £225m debut fund, Fine Industries will serve as the European base for Shenzhen-listed Lianhetech.

Over the past 18 months, Fine Industries has appointed former Aesica Pharmaceuticals managing director Chris Gowland as CEO and former Arysta LifeSciences Corporation president and CEO Christopher Richards as non-executive director.

In the time between NorthEdge's initial backing and Richards' appointment in April 2016, the company expanded its headcount from 241 to 305. However, according to statements issued by both the vendor and trade buyer, Fine Industries currently employs 220 people.

The deal is subject to regulatory approval, which is expected within the coming weeks, a spokesperson for NorthEdge told unquote". The spokesperson also confirmed the deal took place via an off-market transaction, following a three-year holding period.

The sale of Fine Industries marks the fourth exit for NorthEdge, following the IPO of tissue manufacturer Accrol in June 2016; the sale of video games developer Sumo Digital to private investment firm Perwyn in September 2016; and the flotation of pawnbroker and foreign exchange company Ramsdens in February 2017.

Previous funding
NorthEdge invested £25.5m in the buyout of Fine Industries in November 2013, with the GP's partner Ray Stenton and former NorthEdge director James Hall originally taking a seat on the company's board.

Company
Founded in 1977 and headquartered in Middlesbrough, Fine Industries manufactures fine chemicals for the agriculture, pharmaceutical and speciality chemicals markets. The business has a headcount of 220 and generated a turnover of £52m in the year ending September 2016, according to a statement issued by the vendor, with EBITDA of £10m.

People
NorthEdge – Ray Stenton (partner); Tom Rowley (investment director); Ben Wildsmith (portfolio director); George Potts (investment manager).
Lianhetech – Maggie Wang (chairperson, president).

Advisers
Equity – PwC (corporate finance); Addleshaw Goddard (legal).
Company (Lianhetech) – EY (corporate finance); Travers Smith (legal).