Warwick Chemicals

The Opportunity

Warwick Chemicals is a speciality chemicals business which, before our involvement, was owned by Sequa Corp., a large US engineering business. Warwick initially comprised two separate businesses: a speciality chemical manufacturer of TAED, a bleach activator; and a broad network of niche chemical distributors across Europe and Asia.

Sequa’s core US business was focused on the aerospace industry and, as a result, Sequa’s owners (a US private equity group) were looking to divest Warwick together with other non-core assets. We identified an opportunity to work with Warwick’s management team to firstly sell the distribution business to a strategic trade acquirer to enable the business to focus on its stronger manufacturing division. We also saw positive potential in growing the chemical manufacturing business, building on its market leading position in the laundry detergents sector.

The Strategy

We acquired Warwick in 2008 and successfully divested the distribution division in 2010, thereby repositioning Warwick as a focused chemical manufacturer. During our ownership, we worked closely with the management team to enhance the production facilities, including a significant capital investment programme in the manufacturing site in Mostyn, Wales.

In addition, we acquired IDC International Detergent Chemicals which allowed the business to accelerate new product introductions across a broader customer base. We also restructured the sales team to place greater emphasis on the developing markets of North America and China.

The Result

Warwick was sold to Lubrizol, a Berkshire Hathaway company, in December 2014, generating a 2.0x return on our invested capital.