Sterigenics

Sterigenics grew its international medical safety services business globally following our investment as it capitalised on growing demand for sterilisation using ethylene oxide in an underserved market.

The company, based in Oak Brook, Illinois, delivers contract sterilisation and ionisation services to the medical device and pharmaceutical industries.

It also provides services in food safety and the modification of high performance and specialty materials such as semiconductors and polymers. Sterigenics has more than 1,300 employees and operates from 45 sites in 13 countries.

Our investment

We led the buyout of Sterigenics in June 2004 for $311.5m; the company was then a major division of a Belgian listed company. We believed the market was underserved and there was an expansion opportunity for a high quality sterilisation provider in new and existing regions, notably in the fast-growing Chinese market.

We also saw an opportunity to address certain operational deficiencies - in the strategic development of the business and in an underinvestment in certain operational areas, specifically sterilisation process data recording and reporting.

Value creation

Following our acquisition, the company built three large facilities; two ethylene oxide service centres in Shanghai, China, and Wiesbaden, Germany, and an electron beam service centre also located in Shanghai, China.

Sterigenics also grew its operations in the US, Mexico, France, Belgium and the UK. Overall, more than $100m was invested to increase the processing capacity of the business, which was a significant driver in the strong 75% growth in earnings over the period of our ownership.

Meanwhile, we addressed the operational issues and worked with management to reorganise the management structure. Central to the success of this restructure was our appointment of a highly experienced chairman, John Kane, to provide industry expertise and guidance for the management team. With an effective management structure in place, we then implemented a global, plant-level IT system.

Outcome

Under our ownership, Sterigenics performed extremely well, almost doubling its EBITDA. With a co-investor, we invested $117m in the company in 2004. In November 2006, a dividend recapitalisation returned $75m to investors and in March 2011, we sold the company in a secondary buyout for $675m.

Sector

Healthcare

Location

United States

Investment date

2004

Exit date

2011

Deal size (exit)

$675m

Fund

Mid-market fund

Status

Realised

Website

sterigenics.com

Strategy

Key facts

1,300+

employees

45 sites

in 13 countries

75% growth

in earnings under Silverfleet’s ownership

$100m

invested to increase business capacity

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