Sterigenics buys amid speculation PE backer is looking to offload

By Gareth Macdonald

- Last updated on GMT

Competition heating up in sterilisation services sector
Competition heating up in sterilisation services sector

Related tags Private equity Goldman sachs

Sterigenics International has bought Italian gamma-ray sterilisation firm Gammarad in a deal that comes amid rumors that private equity owner GTCR is looking to offload the Illinois-based contractor.

Sterigenics announced its takeover of Bologna’s Gammarad last weekend, explaining that the deal – financial terms of which were not disclosed – will boost gamma irradiation offering in the pharmaceutical, biomedical, cosmetics and food sectors.

The acquisition is the third Sterigenics has made this year behind its takeover of Florida-based Food Technology Service, which it bought in March, and Canada’s Nordion which was purchased in August.

Sterigenics has 15 gamma irradiation contract services facilities in North America but – before the Gammarad deal – only operated one in Europe, which is at a site in Fleurus in Belgium.

Sale speculation

At present, Sterigenics is owned by private-equity organisation GTCR, which bought the contract sterilisation services firm from Silverfleet Capital for $675m in 2011.

Last week, Reuters reported that it had been told by unnamed “people familiar with the matte​r” that GTCR has called in Goldman Sachs and Jefferies have been called in to help it sell Sterigenics for $1.8bn​.

The rumors follow just a few days after rival Steris acquired Synergy Health, a health focused UK-based provider of contract sterilisation services.

At the time​, US rating agency Moody’s suggested that Sterigenics “will face increasing competitive pressure over the medium to long term​” as a result of the Steris acquisition.

Sterigenics did not make any mention of the sale rumors when announcing the Gammarad deal.

Instead CEO Michael Mulhern said: “Sterigenics has committed more than $32m in growth capital to expand existing facilities across the Americas and Europe​.”

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