The Shoreham-by-Sea firm, which was established in 1970, was formerly a subsidiary of Usher-Walker and Sun Chemical. It manufactures pressroom chemicals along with blankets and guillotine cutting sticks.
Hydro-Dynamic Products chairman David Williams said: "Due to the very competitive nature of the press chemicals business, it has been impossible to grow the company. This in turn has made it difficult to attract other companies into the group."
Hydro-Dynamic Products director Gordon Livesey, who is involved in the MBO, said: "It is simply a business decision to save costs. We feel that the costs of being listed on AIM are disproportional to the benefits. Small- and medium-sized companies on AIM sometimes struggle to attract much interest in their shares."
Under the proposed 1.08m deal, the MBO team would retain Hydro-Dynamic Products overdraft, leaving shareholders with 650,000.
Livesey stressed that the same management team, including managing director David Sheard, technical and sales director Roger Markin and finance director Jill Hart, would front the new firm. And he said there would be no redundancies among the firms 60 staff.
Shareholders will vote on the proposed change on Monday 18 March at an extraordinary general meeting in London.
In the six months to 30 November Hydro-Dynamic Products recorded sales of 2.76m and an operating profit of 123,000.
Story by John Davies
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