Endless buy Lancashire Chemical Works2 November 2007
LCW is a specialist manufacturer of chromium-based chemicals and a provider of toll processing services, including spray drying and vacuum drying. The business is based in Glossop, UK, and employs 40 staff. LCW has a long and successful track record under family ownership and the investment from Endless, helped by the introduction of new management, enables the company to move successfully into new markets. Richard Sykes, incoming managing director, commented: 'This is a retirement sale for the family shareholders, although the outgoing managing director Ron Hene is being retained on a consultancy arrangement. I have been discussing this opportunity for some time with Ron and it was only the innovation shown by Endless in the funding structure that delivered an acceptable deal to all concerned. 'Furthermore, I am delighted to be leading LCW into the next phase of its development. LCW has an ideal platform to drive future growth owing to its skilled workforce, its heritage and its outstanding customer base.' Although the changes in the capital gains tax regime are expected by some commentators to result in business sales by family owners, incoming Richard Sykes does not believe this to be the case with LCW. The Company was first established in 1937 as a manufacturer of chromium chemicals for the leather tanning industry in the UK. Since the decline of the tanning industry the business has successfully repositioned itself by developing a number of niche chromium chemicals for use in a wide range of industrial applications including chemical catalysts, metal plating, dyestuffs, oils, paints and lubricants. LCW is one of only a small number of manufacturers in Europe with the expertise and capabilities to produce these products. Since its establishment LCW has also developed a highly successful toll processing business and is one of the largest independent providers in the UK. Toll processing is the name given to a number of methods, including spray drying and vacuum drying, that are used to convert liquid compounds into dry form. These processes have a wide range of uses in a number of different sectors, from producing freeze-dried coffee and milk for the food and drink sector to processing complex chemical compounds for use in the industrial and chemical sectors. Stephen Harrison, who led the deal at Endless, commented: 'We are delighted with the acquisition of LCW, and the opportunity for us to back Richard. The business has a successful and established track record under family ownership and we strongly believe that our investment and the introduction of new management will allow the company to drive into new products and markets, securing LCW a very bright future.' John Nutton, corporate finance partner in the Leeds office of Grant Thornton, who advised Richard Sykes on the buy-in, commented: 'We are pleased that the enthusiasm, energy, knowledge and innovative ideas on structuring displayed by Endless throughout the acquisition process have enabled Richard to complete the buy-in. The combination of Richard's knowledge of the sector and the financial backing of Endless LLP provides a great opportunity to significantly grow and develop the business.'