Saratoga makes first UK investment

The New York-based private equity house has agreed to pay £75m for Sericol, a division of Burmah Castrol which BP acquired in 2000.

Saratoga Partners, a New York private equity firm spun out of Dillon Read in 1998, has made its first UK acquisition, paying £74.5m ($115m) for BP’s speciality printing chemicals business Sericol.

 

Sericol will be purchased from Burmah Castrol, which BP acquired in 2000 for £3bn. The two firms expect to complete the transaction during the first quarter of this year.

 

Sericol’s principal manufacturing facilities are at Broadstairs, UK, and Kansas City, Missouri, USA, with additional operations in Australia, India, China and Brazil. The unit employs around 1,200 staff worldwide. In 2002, Sericol reported turnover of around £130m.

 

BP business unit head Gordon Souter said the company had always planned to divest the business: “When we bought Burmah Castrol in 2000 we knew that, although it was a good business, Sericol did not fit with the rest of our portfolio and that we would look to dispose of it.”

 

Saratoga secured debt financing for the transaction from UK-based Scotia Capital. Sericol will continue to be led by the existing management team, headed by chief executive Ed Carhart.

 

“Sericol fits very well in our focus area of manufacturing companies with niche characteristics and technological and market leadership,” said Christian Oberbeck, managing director of Saratoga Partners.  He added that the unit was particularly attractive because of its “outstanding franchise, the strength and commitment of its management team and its prospects for superior earnings growth.”

 

Saratoga Partners is a leading middle-market private-equity investment firm with $750m of committed capital. It invests in businesses with valuations of between $50m and $500m, specialising in companies in manufacturing, business services and media and telecommunications industries.

 

In 1998, Saratoga Partners spun out as an independent entity owned by its management from UBS AG and Warburg Dillon Read following the acquisition of Dillon Read by Swiss Bank Corporation.