Alchemy launches FCX public-to-private

The UK private equity firm has had a £47m offer recommended by the FCX International board.

Alchemy Partners looks set to add to its list of manufacturing investments in the UK with the acquisition of FCX International, a UK producer of flow control products. Alchemy, through a newly formed company, XCF Investments, has made an offer of 260 pence per share for FCX which has been approved by the firm’s board.

The offer values FCX at £47m, a 29 per cent premium to the last day of trading prior to reports emerging that FCX was in talks with potential bidders for the firm. Of the £47m price, £31.5m will be provided from debt facilities arranged by Barclays Leveraged Finance with the balance provided by Alchemy Partners. 

The sale of the firm is the final chapter of a strategic review for FCX that commenced in September 2000. The firm has disposed of several of its non-core operations since then, raising £66m for shareholders. In the financial year ended 31 December 2001, the continuing operations of the FCX Group achieved a turnover of £154.5m and operating profit of £6.3m.

For Alchemy, which is being advised on the transaction by Altium Capital, this is the second manufacturing acquisition this month. The turnaround specialist paid a nominal price for CompAir, the air and gas compression systems business owned by Invensys.

Alchemy has invested or committed to invest approximately £887m to investments since 1997. Investors in the Alchemy Investment Plan, comprising a series of 91 limited partnerships, include major banking institutions, pension funds and a number of private individuals, which in aggregate are committed to investing more than £249m per annum.