Salt Union
In 1992 Graphite identified the opportunity to acquire Salt Union from its parent, ICI, working alongside an experienced buy-in management team. The buy-in team worked with the incumbent management team to prepare the company for its separation from ICI.
In 1992 Graphite led the £39 million management buy-in of the rock salt and white salt businesses of ICI. The former was the largest provider of rock salt for the de-icing of roads in the UK. The latter was the second largest provider of white salt used in water softening, chloralkali products and animal feeds.
The buy-in team had managed similar businesses in the US and had formulated a detailed plan to reduce costs and increase efficiency. The rock salt business had a near monopoly in certain parts of England and there was scope to increase prices. The white salt business was strongly cash generative and offset the weather dependency of the rock salt business.
Under Graphite's ownership, Salt Union:
- was successfully established as an independent company
- immediately increased profitability through productivity improvements, overhead reductions and price increases
- increased operating profit by 125 per cent to £14.1 million in the three years following the buy-in
Salt Union was sold for £85 million to a US chemicals group in 1995, generating a multiple of 5.2 times cost.
