Fine Industries Sold to Lianhetech

Fine Industries sold by private equity firm to Lianhetech.

Lianhe Chemical Technology, or Lianhetech, a Chinese life sciences company, has acquired the UK-based contract development and manufacturing organization (CDMO) Fine Industries, subject to the usual regulatory conditions. Although there has been considerable Indian investment into the UK fine chemicals sector, this is believed to be the first acquisition by a Chinese firm. Terms were not disclosed.

Based at a site at Seal Sands in North-East England, Fine Industries develops and manufactures complex intermediates and actives for the agrochemical and pharmaceutical industries, plus speciality chemicals. Pharmaceuticals account for about 20% of its turnover of $60 million/year. It employs about 220 people.

Lianhetech is active in the same broad range of industries, plus equipment. Company Chairwoman and President Maggie Wang commented that the acquisition “provides the geographic presence, capability and expertise needed to provide better services and solutions and leveraging Lianhetech’s state-of-the-art technologies for our customers worldwide”.

The Shanghai-based company, which dates back to 1985, currently has two R&D sites, seven chemical manufacturing sites, two machinery sites but it has had no manufacturing presence outside China before this, just offices in Germany and Luxembourg.

The Seal Sands sites was established in 1984 when Laporte acquired a controlling interest in the company running a separate site, now closed. For most of its subsequent history it was owned by Degussa, the predecessor to Evonik. The three main production buildings, a pilot plant and the R&D and QC laboratories were commissioned between 1985 and 1998. The site focused mainly on APIs.

By 2008, however, Seal Sands was a backwater in the Evonik empire. Fine Industries was established that year when a management buy-out took the site into private ownership and eventually into profitability, while also diversifying away from APIs. The company was acquired by Manchester- and Leeds-based private equity firm NorthEdge Capital in 2013, when two of the original four buyers wanted to retire.

The main part of the operations being acquired is Fine Organics, a CMO active in custom and toll manufacturing of fine chemicals, which accounts for over 90% of sales. Also part of the deal are: Fine Contract Research, which is based out of the laboratories at the sites and draws on its analytical services, EHS expertise, cGMP-compliant systems and small-scale manufacturing capability to offer early stage synthetic chemistry services; and, Fine Environmental Services, which markets hazardous liquid waste treatment services by thermal oxidation.

The site has always been export-oriented, with about 30% of sales in North America and 20% in South America, plus traditionally over 20% in Germany. In the early 2010s, about €30 million was invested to boost its capabilities. Two new Heinkel centrifuges, two new pressure filters and both Hastelloy and glass-lined reactors. Total reactor capacity is about 365 m3.

In chemistry terms, notable capabilities include sulphur chemistry, large-scale Grignard reagents and the ability to handle flammable, toxic, corrosive, halogenated and otherwise 'difficult' raw materials and solvents. The site handles products from tens of kilos to hundreds of tonnes/year. In February, just before the sale was announced, Seal Sands had a successful FDA audit, with no Form 483s issued.


Nigel Walker

Mr. Walker is the founder and managing director of That’s Nice LLC, a research-driven marketing agency with 20 years dedicated to life sciences. Nigel harnesses the strategic capabilities of Nice Insight, the research arm of That’s Nice, to help companies communicate science-based visions to grow their businesses. Mr. Walker earned a bachelor’s degree in graphic design with honors from London College of Communication, University of the Arts London, England.