Clearwater advises on MBO of Wells Plastics

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Clearwater Corporate Finance has completed its third Chemicals deal in the last six months, when it advised the management team at specialist additive masterbatch manufacturer, Wells Plastics (“Wells”), on its multi-million pound buyout.

Independent private equity firm, Key Capital Partners (“KCP”), has invested £3.8 million of expansion capital for a significant minority stake in the Staffordshire-based company, alongside senior debt facilities from Natwest and a sizeable investment from incoming executive chairman, Paul Richardson.

Wells supplies additives to global plastic manufacturers and processors that are looking to modify the properties of a broad range of plastic and polymer products in order to provide a range of enhanced properties, such as UV resistance, flame retardancy and oxobiodegradability. The end products are then supplied to a variety of sectors, including consumer, automotive, construction and agriculture.

The company has achieved a sustainable 20 per cent annual growth rate over recent years, driven largely by the growth in demand for its innovative oxobiodegradable product, Reverte™, which speeds up the natural degradation process of plastic to produce water, carbon dioxide and biomass. Widely acknowledged as the most advanced product of its type in the market, it is used mainly in packaging, particularly for carrier bags and in agriculture, and can reduce the biodegrading time of plastics from centuries to years or even months.

The investment from KCP will enable Wells to exploit the major growth opportunity for Reverte™, with a particular focus on targeting the Middle East, Africa and South America, where rapid development is leading to increasing pressure on waste disposal management. The company will also draw on the investment to market directly to consumers in order to increase awareness of the benefits of the product.

Paul Richardson, an experienced CEO with recent experience at KIK Corp and Cott Corp, has joined sales and marketing director, Carl Birch, and technical director, Andrew Barclay, on the board of Wells. Partner at KCP, Andy Gregory, has also joined the board as non-executive director, while former managing director, David Nelson, will retain a role at the company.

Philip Nuttall, Head of the chemicals sector at Clearwater Corporate Finance, said: “As a UK manufacturer with an innovative product suite and experienced management team, Wells is extremely well positioned for further profitable growth as it continues to exploit export opportunities in key global territories. I have no doubt that the company will prove to be a great investment for its new backers.”

Andy Gregory at KCP said: “The management team at Wells has consistently displayed great vision in terms of predicting and responding to the future needs of retailers, manufacturers and other end users of plastic products. Our investment will enable the company to expedite its growth strategy and to move increasingly into global markets.”

Paul Richardson, executive chairman at Wells, said: “The investment from KCP will enable Wells to exploit the major growth opportunity for Reverte™, with a particular focus on targeting the Middle East, Africa and South America, where rapid development is leading to increasing pressure on waste disposal management, and will position Wells to become the UK’s largest exporter in this growth market. The company will also draw on the investment to market directly to consumers in order to increase awareness of the benefits of the product.”