Close Brothers PE buys BP unit

In BP’s second recent divestment to private equity firms, the UK oil giant has sold the speciality mining chemicals business of Burmah Castrol to CBPE for £32m.

Close Brothers Private Equity, the UK-based mid-market private equity firm, has reached agreement with UK petrochemicals group BP to acquire Fosroc Mining for £32m.

 

Fosroc Mining is the speciality mining chemicals business of Burmah Castrol and was part of BP's £3bn acquisition of the energy group in 2000. The company has 13 manufacturing sites in seven countries and employs around 1,000 staff worldwide and 2002 turnover was £84m.

 

CBPE is investing £14.26m – equivalent to 80 per cent of the equity – with the balance of debt funding provided by Barclays Leveraged Finance. Fosroc Mining will continue to be led by the existing management team, headed by chief executive Sandy Arbuthnot, while CBPE partner Sean Dinnen will join the board.

 

According to Dinnen, Fosroc is 'a well managed business with a leading global market position, strong cashflows and good prospects for growth from corporate activity and geographical expansion. We are backing a strong management team of a company with a strong market position.” He added that future bolt-on acquisitions were a possibility, but that the primary objective would be to expand Fosroc’s profile into new markets, including India and China.

 

Earlier this month, Saratoga Partners, a New York private equity firm spun out of Dillon Read in 1998 paid £74.5m for BP’s speciality printing chemicals business Sericol.

 

Close Brothers Private Equity is the private equity investment business of Close Brothers Group, the listed UK merchant bank. The business invests in transactions with a value of between £10m to £75m. CBPE closed its sixth private equity fund, CBPE (UK) Fund VI, in February 2002 on £202m.

 

BP was advised on the sale by Credit Suisse First Boston.