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Hargreaves Services, a minerals and support services group, has strengthened its liquid transportation business with the acquisition of Imperial Tankers.

The acquired business specialises in moving liquid products similar to those transported by Hargreaves’ Bulk Liquid Transport division.

Hargreaves will merge Imperial Tankers with Bulk Liquid Transport, making it one of the top five companies in the UK’s chemical tanker sector.

The deal was worth an initial £5 million sum paid in cash from Hargreaves’ existing resources.

The agreement includes an earn-out of up to £2 million payable in cash based on the performance of the combined businesses in the 12 months following completion.

Hargreaves’ chief executive, Gordon Banham, said Imperial is a well-run chemical tanker business that is a perfect fit with Hargreaves’ operations. “The integration of the two businesses will start immediately and will result in significant synergies and savings. We view the growth potential of the combined chemical tanker operations as encouraging.”

The deal was part funded by Hargreaves’ banker Royal Bank of Scotland (RBS), which was advised by Mark Lisgo, an associate at Eversheds LLP.

Eversheds reviewed the transaction and prepared the relevant finance documents.

Lisgo said the firm has acted for RBS in connection with Hargreaves on several previous transactions, including the acquisitions of The Monckton Coke & Chemical Company in 2005 and of Maltby Colliery earlier this year.

“We are proud to play a continuing role on behalf of RBS, and in conjunction with the other professionals involved, in the growth and success of the Hargreaves Group,” he added.

The acquirer appointed KPMG to manage a financial due diligence review, which was headed by transaction services director Chris Stott.

“This acquisition represents an excellent opportunity for Hargreaves to step change the scale of its tanker division and also secure a strong management team with a proven track record,” he said.

“We are pleased to continue supporting Hargreaves’ strategic acquisition program and as part of the close-knit team of M&A professionals involved in this deal were pleased to deliver against a tight timeframe in a co-ordinated manner.”

Established in 1994, Hargreaves sources, produces, processes and handles carbon-based and other bulk minerals throughout the UK and Europe. It also provides technical and project management support services within the energy and waste industries.

Imperial, which was bought by its management from ICI some ten years ago, includes Terra Nitrogen, UK Bitumen, Petroplus and Koppers among its key clients.

In its last financial year, Imperial achieved a pre-tax profit of £1.35 million on sales of £16.1 million. Warranted net assets at completion were £3 million.

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