KemFine started operating under its own name on 1 October, on completion of its acquisition by new majority owner, the venture capital company 3i. The terms of the deal have not been divulged, but analysts have suggested that the price tag was likely around €70 million.
The deal continues a trend in the European chemicals sector for the buyout of fine chemicals companies by private equity firms. For example, earlier this year MG Technologies sold off its Dynamit Nobel fine chemicals business to Kohlberg Kravis Roberts, bidding along with Credit Suisse First Boston's private equity business.
Ernst & Young recently carried out a survey which found that over the last few years, private equity firms have invested in 94 European chemical companies and divested 22 businesses. Typically these firms prefer to make a profit within 3 to 4 years, and the dearth of divestments underscores the difficulties in making these investments pay.
The poor economic conditions affecting the broader European chemicals industry - including softening demand, the strength of the euro and high raw materials prices as the price of oil has reached record levels - is one of the drivers for the divestments.
A spokesman for KemFine said it will continue to focus on its current key business areas - custom manufacturing of advanced intermediates for the pharmaceutical industry made to Good Manufacturing Practice (GMP) standards, as well as intermediates and active ingredients for the agrochemical industry.
Kemira recently expanded the fine chemicals unit's pharmaceutical capabilities by revamping a multipurpose plant that possesses approximately 45 square metres of reactor capacity. In addition, a separate intermediate plant contains 105 square metres of capacity, including specialized equipment for a large variety of technologies such as an inconel reactor for lithiations and a Buss-Loop reactor for hydrogenations.
KemFine also has an affiliate company - Pharmatory - that specialises in the custom contract development and small-scale cGMP manufacturing of active pharmaceutical ingredients (APIs) and intermediates.
The company, which had net sales of around €50 million in 2003, also said that it would be interested in making acquisitions itself.