Tim Webb, chairman of RW Coatings, said: "We've been growing at 25% a year in sales and turnover for two years. We require funding to accelerate that growth.

"It's good that against a backdrop of difficult times in the industry we have enjoyed as much growth as we have. We would not want to see that risked.

"Exports are 85% of our turnover and it is good they will continue to get the support and funding they deserve. Ultrachem's ethics and values are what we subscribe to."

RW Coatings' Clearcoat range and brand names will continue to be marketed independently through John Russell to current dealers and customers, Webb added.

He said the company would "over a shortish period of time" quit its Hertford base and move to Ultrachem's factory in Bristol.

A handful of production staff have chosen not to move and will receive "enhanced" redundancy packages, Webb said.

Both companies boast sales of UK-made products to more than 100 countries. Ultrachem has 110 staff, more than half a dozen bases in the UK and Ireland and a £27m annual turnover.

Ultrachem managing director Tony Brinton said: "I have known Tim for 25 years. His company has a good name and the Clearcoat range a good following.

"It would be crazy to change them. He has concentrated the business focus on exports, which fits perfectly with the ongoing strategy within Ultrachem."