Inspec to raise pounds 50m through float: Speciality chemicals business goes to market with pounds 100m price on its head

INSPEC, the speciality chemicals business formed in a buyout from BP in 1992, is to be floated on the Stock Exchange with a market capitalisation valued at more than pounds 100m.

The flotation, which could involve either placing shares with intermediaries or an offer for sale, will raise around pounds 50m in new money.

The original participants in the buyout should see the value of their shareholdings leap by pounds 15m, a spokesman said.

Inspec manufactures and supplies niche speciality chemicals in which it is able to dominate the market. These include materials for lubricants, coatings, plastic packaging and fragrances.

At the end of last year Inspec bought the Kansas-based Allco Chemical Corporation, which makes speciality acids used in the making of coatings and temperature-resistant plastics.

Inspec's chairman, John Hollowood, and its group managing director, Jim Ratcliffe, led a combined management buy-in of BP's fine chemicals business in 1992, having looked at a number of possible chemicals companies to buy.

The existing management team joined the bid, with 80 per cent of the UK workforce also holding shares.

Inspec, including Allco, made an aggregate operating profit before interest and exceptional items of pounds 9.7m last year on an aggregate turnover of pounds 56.4m.

The flotation will allow the group to retire expensive venture finance taken out at the time of the buyout. Venture financiers own about 70 per cent of the company.

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