Laporte to return cash after £810m disposal to KKR

Laporte, the chemicals group, yesterday sold half the company for £810m in cash, to leave it focused on speciality chemicals for the pharmaceutical and life sciences industry.

Laporte, the chemicals group, yesterday sold half the company for £810m in cash, to leave it focused on speciality chemicals for the pharmaceutical and life sciences industry.

Jim Leng, chief executive, said the move marked the culmination of the transformation of the group. In his five years at the helm, he has sold 85 per cent of the company that existed in 1995.

He said Laporte had evolved from a diversified business run on regional lines, to a global company concentrated on three high-growth, high-margin, divisions.

Laporte shares closed 20 per cent higher at 508.75p. The deal to sell non-core businesses - to Kohlberg Kravis Roberts, the US private equity house - was worth more than the market capitalisation of the entire Laporte group a week ago. Laporte will use the disposal proceeds to return £200m, or about 100p a share, to investors and repay debt of £517m, leaving it ungeared.

Mr Leng, 54, will now step down from full-time responsibilities and become the non-executive chairman. Analysts said his change of role was a sign that he had completed his job and that the remaining company was likely to attract a bid.

Mr Leng said: "We have been bold but measured. There are some fabulous products in the businesses we are selling, but we cannot do everything. The businesses that are going would have needed a lot of investment. We are now focused on faster growth areas."

Brian Wilkinson, an analyst at HSBC, said: "The market is taking the view that this is not the end of the story. Laporte has now divested all the poison pills. It's pure play, with good positions in its markets.

"While it is not explicitly putting up the remainder of the group for sale, this deal has opened up all the strategic options."

The businesses sold, which had sales last year of £494m, include all Laporte's activities in pigments, additives, compounds, water technology, timber treatment and electronics.

This includes Laporte's chemicals that keep the stripes separate in toothpaste, retain the fizz in Coca Cola, and lock in helium in the soles of gas-cushioned sports shoes.

The company that remains will be made up of three units: Fine Chemicals, which makes the ingredients of medicines and agricultural products, Performance Chemicals, which produces the tint for contact lenses and synthetic lubricants, and a Catalysts division serving the plastics industry. Among new products coming from Laporte is chemical for dog collars that makes fleas impotent.

Laporte sold businesses worth £350m between 1996 and 1998, before buying the speciality chemicals group Inspec for £611m.

Yesterday it said it had firepower of £250m, including bank facilities, to spend on acquisitions.