New Mountain Closes Sale of Specialty Chemical Maker

New Mountain Capital has sold Gelest to Mitsubishi Chemical America, the U.S. subsidiary of Mitsubishi Chemical.

Gelest is a maker of specialized organo-silicon compounds, metal-organic compounds, and silicone materials that are used in both commercial production, and research and development in the life sciences, medical materials, pharmaceutical, diagnostics and separation science, personal care, and semiconductor sectors.

Gelest, led by its founder and chairman Dr. Barry Arkles, and CEO Ken Gayer, has 240 employees and is headquartered near Philadelphia in Morrisville, Pennsylvania.

“New Mountain has been a terrific partner and helped us to significantly grow the company over the past three years. We now look forward to joining Mitsubishi Chemical where their capabilities and breadth will allow Gelest to create even more value for customers and opportunities for employees,” said Mr. Gayer.

New Mountain acquired Gelest in March 2017 in partnership with Mr. Arkles and its management team. During its ownership term, Gelest more than doubled its enterprise value by building its capabilities in the life sciences, medical device, and microelectronics end markets, both organically and through the June 2019 add-on acquisition of Bimax Chemicals, a Pennsylvania-based manufacturer of specialty monomers and polymers used to make contact lenses, personal care products, coatings and adhesives.

“Since partnering with Gelest in 2017, we have been extremely impressed by the management team and Gelest’s ability to innovate continuously to serve the evolving needs of its demanding customers,” said Andre Moura, a managing director at New Mountain. “We are proud to have supported Gelest’s execution of an organic and inorganic growth strategy, and we thank everyone at Gelest for an exceptional partnership.”

“We are extremely proud of the efforts of everyone who has contributed to making Gelest the company that it is today, with world-class technology and supply capabilities, made possible by the industry-leading team we have built and support from New Mountain for our strategic investment programs. This has made Gelest an extremely valuable partner to customers around the world,” added Dr. Arkles.

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, the firm held an oversubscribed hard cap close of its fifth private equity fund, New Mountain Partners V LP, with $6.1 billion of capital. New Mountain was founded in 1999 and is headquartered in New York City.

Tokyo-based Mitsubishi Chemical is Japan’s largest chemical company and was formed through the 2017 merger of Mitsubishi Chemical Corporation, Mitsubishi Plastics, and Mitsubishi Rayon Co. The company’s US subsidiary is headquartered in New York City and is led by President Steve Yurich.

The sale of Gelest to Mitsubishi Chemical was announced in May 2020 and just recently received all its regulatory approvals.

Private Equity Professional | October 6, 2020

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