Specialty chemicals firm FRX Polymers Inc. has secured $12 million in a round of financing led by an unidentified Chinese private equity fund, and plans an initial public offering next year in Australia where it hopes to raise more than $20 million.
The Chelmsford, Mass.-based company said it will use the A$15.15 million ($12 million) in private financing to support doubling of production capacity at its main factory, in Antwerp, Belgium, and help it grow, with a focus on Asia.
“This pre-IPO funding significantly broadens the company's investor base as it positions FRX for an initial public offering in the Australasian region planned for the second quarter 2018,” said Chairman Ross Haghighat, in a statement.
In a subsequent email, the company said it would be listing on the Australian Stock Exchange, or ASX.
The company, which manufactures polymeric halogen-free flame retardants, said that China is the world's fastest growing region for FR plastics. This latest round of financing was heavy on Asian capital.
FRX declined to identify the lead investor, other than to describe it as a “major Chinese private equity fund.”
It said other parties investing in this round included Brightfield Chemical, a distributor of FRX products based in China, and what it called “several prominent private equity and hedge funds and family offices located in Australia, Hong Kong and Southeast Asia.”
“We are delighted to have completed our pre-IPO mezzanine financing and welcome our new investors to FRX,” Haghighat said.
FRX President and CEO Marc-Andre Lebel said the funds will be used to grow globally with a “strong focus in Asia,” as well as the capacity expansion in Belgium.
The company said it hoped to raise a minimum of A$30 million ($23.3 million) in the IPO.
“FRX is in the high growth phase of its journey,” the company said. “A good deal of our growth is occurring in Asia and so the ASX is a natural fit for FRX, seeing that we have a China and South East Asia oriented growth strategy.”
“More details about our forward plan will be shared at the appropriate time,” the company said.
It said it plans to expand production in Asia at some point but declined to share details.
This latest announcement is not the first time FRX has received significant funding from Chinese investors.
Last year it said it completed a $22 million round of financing led by Chinese investment firm CITIC Capital.
In 2014, German plastic materials maker Evonik Industries AG said its venture capital arm led a $12 million fundraising for FRX. Evonik's venture capital wing was also part of the CITIC Capital round of financing.
FRX has developed halogen free flame retardants under the Nofia brand name to meet demand for alternatives to halogenated flame retardants, which face concerns over toxicity.
“We have developed a game-changing, unique product line of sustainable polymeric additives to address the global need for halogen-free flame retardant plastics,” Lebel said.
The company targets its flame retardants at electronics, textiles, building and construction, and transportation applications.
In addition to the commercial plant in Antwerp, it maintains a pilot plant at its Chelmsford headquarters.
