Acquisition of Surface Specialties UCB

The films business of the Belgium-based UCB Group is set to be bought for €320m by a consortium led by the former Managing Director of Hays Chemical Distribution, Dennis Matthewman, who will chair the new company, and Candover Partners Ltd.

The new company, headed by the existing management team, will be exclusively focused on the development and production of high quality specialty films. Trading will continue under the Surface Specialties UCB name for a period of time. The acquisition is expected to be completed in September 2004.

The €362m turnover business, previously called UCB Films, is a leading global producer of speciality Biaxially Oriented Polypropylene (BOPP) and cellulose (Cellophane™) films with production sites in the UK, USA, Belgium and Australia.

It holds a leading global position in the markets for labels and security films, coated packaging, overwrap and biodegradable and compostable films, employing some 1,600 people worldwide.

The films operation is dedicated to innovation. A new Research & Development Centre at Wigton, UK, was officially opened in 2002 by the Prime Minister, the Rt. Honourable Tony Blair and the business has benefited from substantial investment in operations and technology in recent years. The business also has an enviable reputation for service and global customer support.

The films acquisition includes the 50% equity in Securency Pty Ltd, which manufactures and markets Guardian® high security substrate for polymer banknotes, and substrates for government security documents worldwide. The high-tech polymer technology aggressively challenges the banknote counterfeiting threat, and was jointly developed by UCB and the Reserve Bank of Australia, which intends to retain its 50% equity in Securency.

Both joint venture partners recognise the global potential of this innovation and will continue to support the dynamic research and development program for this technology and encourage growth through new investments, such as the establishment of a European substrate plant as part of the commitment to the European licence.

Says Dennis Matthewman: “I am particularly excited at the prospect of working with such an exceptional management and employees and to continue to develop this world class business which has been successfully built up by UCB over many years.”

Says Candover Director, Julian Delano: “This is a strong business with good long-term growth potential. It holds leading positions in its chosen key markets and has a diverse customer base. The management team is highly experienced and committed to its on-going success.

“Investment will continue and will be focused on areas of excellence where the company can extend its world leadership based on its own research and development and utilising its first rate assets, resources and facilities.”

The sale is in line with UCB’s strategy highlighted recently by the acquisition of the UK-based biotech company Celltech.

Adds Georges Jacobs, Chairman of the Executive Committee of the UCB Group: “We are pleased that the investors behind the purchase of this business realise the long-term potential it offers and the market opportunities which exist for a well-invested, well-managed and highly targeted films business.

“It will be ‘business as usual’ for the time being, however we are looking forward to exciting future developments.”

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