NorthEdge books 2.5x on chemicals trade sale

The Northern England-focused firm has sold Fine Industries to a Chinese-listed life sciences company.

NorthEdge Capital, a Northern England-focused buyout firm, has sold chemicals manufacturer Fine Industries to China-listed life sciences company Lianhe Chemical Technology Company (Lianhetech), according to a statement from the firm.

The sale, NorthEdge’s fourth exit, will generate a 2.5x return for investors in the £225 million ($282 million; €265 million) NorthEdge Capital Fund I.

Investors in Fund I include Iowa Public Employees’ Retirement System, Alaska Permanent Fund, Industriens Pension and West Yorkshire Pension Fund, according to PEI data.

NorthEdge invested in Fine Industries, a contract manufacturer of products and solutions used in the chemical and life sciences industries, in November 2013. The company has around 220 employees and delivered a turnover of £52 million and an EBITDA of £10 million in the year to September 2016, NorthEdge said.

Listed in Shenzhen, chemical contract manufacturer Lianhetech has a market capitalization of around $2 billion and revenues of more than $600 million across seven chemical production sites, two machinery production sites and two research and development centres in China. Fine Industries, based in Middlesbrough, will become Lianhetech’s European base.

“The acquisition provides the geographic presence, capability and expertise needed to develop new products and better utilise Lianhetech’s state-of-the-art technologies for our customers around the world,” Maggie Wang, board chairwoman and chief executive at Lianhetech said in the statement.

NorthEdge invests in companies seeking equity investments to support MBOs, development capital and equity release. It typically invests between £5 million and £45 million, focusing on established businesses, typically with a turnover greater than £10 million and profits of more than £1.5 million.

In March 2016 NorthEdge closed its second fund on its £300 million hard-cap after just four months in market. The fund was fully allocated at launch and attracted both existing and new institutional investors, as reported by Private Equity International.

In October the firm opened its third office, in Birmingham, fulfilling a long-standing strategic objective to open an office in the Midlands, as reported by PEI. The firm also has offices in Manchester and Leeds.