New Mountain Capital has agreed to acquire the chemicals business of publicly-traded Aceto Corporation (OTC: ACETQ) for $338 million.
In February 2019, Aceto filed a voluntary petition under Chapter 11 of the US Bankruptcy Code as it began a process to sell its chemicals unit and pharmaceuticals unit in separate transactions.
Aceto’s chemical unit is a developer, marketer and distributor of more than 800 chemical compounds including agricultural protection products (herbicides, insecticides, and fungicides) and specialty chemicals (coatings, resins, adhesives, sealants, fuel additives and lubricants). The unit had revenues of $178 million and a gross profit of $38 million in FY 2018. Financial results for the unit in FY 2017 were similar.
The chemical unit – headquartered on Long Island in Port Washington, NY – has sourcing offices in Mumbai, India; Shanghai, China; and Tokyo, Japan. The unit also has distribution centers in Charleston, SC; Chicago, IL; Houston, TX; Los Angeles, CA; Newark, NJ; Toronto, ON; Manchester, UK; Paris, France; Hamburg, Germany; Rotterdam, Netherlands; and Singapore. Click HERE for Aceto’s chemicals unit webpage.
“Aceto is a leader in its space, and we look forward to partnering with the team to support the next phase of growth,” said Andre Moura, a managing director at New Mountain Capital. “We will be working closely with management to help the company realize its full growth potential by scaling capabilities in key markets and investing in new organic and inorganic initiatives while maintaining the high level of quality and reliability which have always been the hallmarks of Aceto’s success.”
New Mountain is an industry generalist and seeks to acquire just three or four companies each year, typically in the $100 million to $1 billion enterprise value range, and generally invests $100 million to $500 million per transaction. In September 2017, New Mountain held an oversubscribed final close of its fifth private equity fund, New Mountain Partners V LP. The new fund closed at its hard cap with just over $6.1 billion of capital commitments. The firm was founded in 1999 and is headquartered in New York (www.newmountaincapital.com).
CIM Partners, a New York-based advisory firm specializing in the chemical, ingredients and materials industries, is the financial advisor to New Mountain (www.cimpartners.com).
© 2019 Private Equity Professional | April 17, 2019