Wind Point Adds Callery from Edgewater

Ascensus Specialties, a portfolio company of Wind Point Partners, has agreed to acquire specialty chemical company Callery from Edgewater Capital.

Callery was formed by Edgewater to acquire the inorganic specialties business of chemical giant BASF in March 2017. BASF acquired the business, then operating as the Callery Chemical division of Mine Safety Appliances Company, in 2003 for $65 million.

Callery is a developer and producer of specialty inorganic chemicals that are used for the synthesis of high-value molecules in the pharmaceutical, agricultural, electronics, polymers, and adhesives markets. The company’s products include specialty alcoholates, boranes, and alkali metals.

Callery is the only US producer of potassium metal (produced at high temperatures by reacting potassium chloride with sodium metal) and most of the company’s products are highly reactive, air- and water-sensitive compounds. Callery, founded in 1939, is led by CEO Harry Rathore and is headquartered north of Pittsburgh in Evans City, PA (www.callery.com).

According to Wind Point, Bellevue, WA-based Ascensus is the largest global producer of dry and liquid sodium borohydride which is used predominantly as a synthesis and process aid in the production of a variety of active pharmaceutical ingredients including high growth antiretrovirals for the treatment of HIV/AIDS.  Sodium borohydride is also used to bleach wood pulp in the paper industry.

“We are very excited to have Callery join the Ascensus family. Together, Ascensus and Callery will become a global reagents leader with #1 market positions in high-growth, attractive life science, pharmaceutical, and niche specialty industrial end markets,” said Mike Huff, CEO of Ascensus. “Both companies’ recent capacity expansions position us well to support our customers’ growth for years to come.”

Wind Point acquired Ascensus in January 2015 from Dow Chemical as an add-on for Vertellus Specialties, a former Wind Point portfolio company (exited in November 2016), and Ascensus is now a standalone company under Wind Point ownership. Ascensus was founded in 1939 as Metal Hydride, Inc. and was acquired by Thiokol Chemical in 1976. Thiokol merged with Morton International in 1982 to become Morton-Thiokol. In 1999, Rohm & Haas acquired Morton-Thiokol and in 2009 Rohm & Haas in turn was acquired by Dow Chemical.

Wind Point invests from $50 million to $100 million in companies with EBITDAs of at least $10 million. Industries of interest include business services, consumer products and industrial products. In June 2017, Wind Point held a final closing of its eighth fund, Wind Point Partners VIII LP, with $985 million of capital commitments. The fund exceeded its initial hard cap of $750 million and is the largest fund closing in Wind Point’s history. The firm was founded in 1984 and is based in Chicago.

Edgewater Capital Partners invests in lower middle-market performance materials businesses. The firm has specific expertise in specialty chemicals, pharmaceuticals, and engineered substances. Platform acquisitions will have revenues from $10 million to $100 million, more than $2 million of EBITDA, and gross margins greater than 20%. The firm was founded in 1998 and is headquartered in Cleveland.

Debt financing for the buy of Callery was underwritten by Antares and KeyBanc Capital Markets, which also served as the financial advisor to both Callery and Edgewater.

This transaction is expected to close by the end of September.

© 2019 Private Equity Professional | September 6, 2019

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