Finnish Chemicals

Leading European producers of chemicals for the pulp and paper industry.

In 1996 Montagu jointly led and structured the £160 million (€256 million) Management Buyin of Finnish Chemicals, a manufacturer of chemicals for the pulp and paper industry, from its joint owners UPM-Kymmene and Nokia Corporation. The deal was, at the time, Finland's largest ever buyout.

This opportunity arose because both of the vendors wished to focus on their respective core businesses. Montagu was approached by Steve Smith, an experienced chemical industry executive, when he was looking for private equity investors with expertise and experience in this sector as well as the capacity to do deals in the Nordic region. Drawing on HSBC Investment Bank's expertise in both these areas, Montagu was able to come up with an acceptable funding package at short notice.

Finnish Chemicals was founded by UPM-Kymmene and Nokia as a joint venture in 1991 by combining the chemical activities of both parent corporations. The Nokia arm of the business was founded as a chlorine producer by ICI and Solvay in 1937 and that of Kymmene was founded at the turn of the century.

Finnish Chemicals was one of the leading European producers of chemicals for the pulp and paper industry. The company's major product, sodium chlorate, had replaced chlorine as the preferred environmentally sound chemical for bleaching pulp and the company also has a small speciality chemicals division, as well as selling chlorine related products to the water treatment and general industrial markets.

In 2000, we supported the company in the acquisition of Huron Tech Corp. Huron was the market leader in sodium chlorate in the southeast United States.

In February 2005 the company was sold to Kemira Oyj for a total consideration of €345 million.

Deal details

Deal type: Management Buy-In Investment Year: 1996 Country: Nordics Status: Realised Value: £160 million Industry Sector: Industrials