Vertellus Specialties, a manufacturer of specialty chemicals and a portfolio company of Wind Point Partners, has agreed to acquire the assets of the sodium borohydride business of Dow Chemical. This acquisition expands Vertellus’ product offerings to pharmaceutical, agrochemical, and industrial sectors, and boosts the company’s life science chemistry capabilities. The transaction is expected to close in the first quarter of 2015.
The Sodium Borohydride (SBH) business is a manufacturer of sodium borohydride used in the synthesis of fine chemicals such as pharmaceutical ingredients and agrochemicals. Sodium borohydride is predominantly used 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. It is also used in bleaching applications, such as mechanical wood pulping for newspaper and tissue production.
Vertellus Specialties manufactures specialty chemicals for the agriculture, nutrition, pharmaceutical and medical, personal care, plastics, coatings and industrial markets via two divisions: Agriculture & Nutrition and Specialty Materials. Wind Point acquired Vertellus in December 2007 in partnership with CEO Rich Preziotti. Previously, Mr. Preziotti was Vice President and General Manager of Honeywell Chemical and Fluorine Products, a $1.2 billion manufacturer of performance, life science and fluorine chemicals. Vertellus is headquartered in Indianapolis (www.vertellus.com).
The acquisition of SBH accelerates Vertellus’ strategy to expand its product offerings in the life science sector through both organic growth and strategic acquisitions. Revenues from life science applications represent more than 65 percent of the company’s total revenue, and Vertellus expects this acquisition to increase its ability to service the pharmaceutical and agriculture sector.
“Vertellus is impressed with SBH’s market leading position in the supply of processing aids to fine chemical customers, specifically pharmaceutical and agrochemical manufacturers. We are excited about the opportunity to serve the high growth synthesis segment from the SBH’s world class manufacturing facility in Elma, Washington,” said Mr. Preziotti.
“Completing strategic acquisitions is a key driver of our value creation plan, and with the SBH business as well as our recent acquisition of Pentagon Chemicals, we are successfully diversifying our portfolio with a focus on specialty chemicals, particularly in life sciences and high growth industrial markets,” said Alex Washington, a managing director at Wind Point Partners. “The SBH business is attractive and highly complementary to our existing portfolio of products, including processing aids such as Vitride® reducing agents for the fine chemicals industry.”
Wind Point Partners invests from $20 million to $70 million of equity in companies with revenues from $100 million to $500 million and EBITDAs of at least $8 million. Industries of interest include business services, consumer products, healthcare and industrial products. The firm has approximately $2.5 billion in capital under management and has completed more than 90 investments and 161 add-on acquisitions across its seven private equity funds. Wind Point Partners is based in Chicago (www.wppartners.com).
2014 PEPD • Private Equity’s Leading News Magazine • 12-9-14