New Mountain Sells ILC Dover to Ingersoll Rand
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New Mountain Sells ILC Dover to Ingersoll Rand

Buy of ILC Dover, at a valuation multiple of 16.4x, will be used by Ingersoll Rand to begin an expansion into the life sciences sector

ILC Dover is a designer and manufacturer of flexible fabric and film protective products used in biopharmaceutical, pharmaceutical, medical device, and space applications.

SOURCE: ILC Dover

Publicly traded Ingersoll Rand has agreed to acquire ILC Dover, a portfolio company of New Mountain Capital, for $2.3 billion in cash plus an earnout based on 2024 operating results.

ILC Dover is a designer and manufacturer of flexible fabric and film protective products used in biopharmaceutical, pharmaceutical, medical device, and space applications. The company operates 11 engineering and production facilities located in North America, Europe, and Asia, with more than 2,000 employees. ILC Dover, led by CEO Corey Walker, was founded in 1947 and is based in Frederica, Delaware.

Source: ILC Dover

ILC Dover is estimated to have annual revenues of approximately $400 million in 2024, with adjusted EBITDA margins in the mid-30s. Approximately 75% of ILC Dover’s revenue are from consumable, like-for-like replacement or recurring revenue streams. Based on the $2.3 billion purchase price, and assuming a 35% adjusted EBITDA margin, this results in a valuation multiple of more than 16.4x.

New Mountain acquired ILC Dover from Behrman Capital in February 2020. “Since we acquired ILC in early 2020, we have made substantial investments to support and drive growth. ILC significantly increased its manufacturing capabilities and cleanroom capacity while also driving meaningful operational initiatives to better serve its customers,” said Andre Moura, managing director at New Mountain Capital. “We would like to thank Corey Walker and his management team for the successful partnership. Under Corey’s leadership, the business materially expanded its product set, including its portfolio of flexible, single-use solutions for sterile and aseptic manufacturing processes. We see a strong fit between Ingersoll Rand and ILC, and we are confident that Ingersoll Rand is the right partner for its next stage of growth.”

As part of this acquisition, Ingersoll Rand will establish a new life sciences platform within its precision and science technologies segment, which will include the operations of ILC and Ingersoll Rand’s existing life science-focused brands including Thomas, Welch, Zinsser Analytic, Tricontinent, and Air Dimensions. According to Ingersoll Rand, the new platform will have total annual revenues of approximately $700 million, including $400 million from ILC Dover, and will be led by Mr. Walker.

The buy of ILC Dover gives Ingersoll Rand access to new technologies for life science applications including powder and liquid single-use technology for biopharma and pharma, and niche technologies used in the design and production of silicone, thermoplastic, and specialty rubber components for medical devices.

Source: ILC Dover

“I am very proud of our team’s passion for innovation, commitment to world-class quality, and overall dedication to our customers during a period of rapid growth,” said Mr. Walker. “I’m excited to combine the Ingersoll Rand and ILC Life Science portfolio of products that allow us to serve our customers from the discovery phase in the laboratory to the commercial production of life saving therapies. ILC Dover’s direct channel access coupled with Ingersoll Rand’s proven growth and efficiency tools will allow us to accelerate our ability to serve customers across their workflows.”

“This acquisition is the next phase of our long-term vision to expand into higher-growth end markets like life sciences. I am incredibly excited to partner with Corey and the outstanding team at ILC, whom we’ve admired for their innovative products and decades of experience in life sciences, to enhance our presence in key workflows and applications,” said Vicente Reynal, Ingersoll Rand’s chairman and CEO.

North Carolina-headquartered Ingersoll Rand (NYSE: IR) was formed in February 2020 through the spinoff of the industrial segment of Ingersoll-Rand – now known as Trane Technologies – and its merger with publicly traded Gardner Denver. The operations of Ingersoll Rand date back to 1871 and Gardner Denver to 1859.

Today, Ingersoll Rand is a provider of air, gas, liquid, and solid flow technologies used in industrial and commercial applications. The company operates through two segments: industrial technologies and services (air and gas compression, vacuum, blower products, fluid transfer equipment, power tools, and lifting equipment); and precision and science technologies (pumps, gas boosters, hydrogen compression systems, and automated liquid handling systems).

New Mountain is an industry generalist and invests between $100 million and $500 million per transaction in companies with enterprise values typically between $100 million and $1 billion. The firm, founded in 2000 and headquartered in New York City, manages over $50 billion in aggregate assets in private equity, credit, net lease real estate and public equity funds.

In January 2021, New Mountain closed its newest flagship fund, New Mountain Partners VI LP, with $9.6 billion of capital, and the firm’s first non-control private equity fund, Strategic Equity Fund I LP, with $640 million of capital.

Jefferies and Goldman Sachs were the financial advisors to ILC Dover and New Mountain Capital.

© 2024 Private Equity Professional | March 26, 2024

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