Victrex was the sole commercial manufacturer of a high performance polymer known as “PEEK” with a range of uses in manufacturing, transport, electronics, aerospace and consumer sectors. Although the business had been successful in developing its products, opening new markets and increasing sales by more than 20% annually, ICI, the previous owner had concluded that it could not develop sufficient volumes to be commercially significant for them. In September 1993, the business was therefore sold to an investor group, involving Cinven.
The company had a technically very strong and well established management team who knew the business well and possessed a balanced range of skills to grow the business into new geographical markets and develop new applications. Strong cashflows would also enable rapid repayment of its acquisition debt.
In fact Victrex exceeded expectations. Sales increased by more than 80% in the two years following the buyout. This was accompanied by a tripling of profits over the same period. The business was floated on the London Stock Exchange in December 1995, barely two years after acquisition.
Multiple returned on investment: 11x