GEO in midst of sale process, Nomura advising — sources

In May 2019, Bhavna Kaul, Marlene Givant Star and Joao Grando reported that Ambler, PA-based GEO Specialty Chemicals was involved in a sale process with Nomura advising, a relationship that could have led to an introduction into the company. They reported that GEO generated around USD 20m in EBITDA and that the valuation was likely to be in the high single digits.

On September 3rd, the specialty chemical company was acquired by Arsenal Capital-backed CPS Performance Materials.

GEO Specialty Chemicals, a producer of specialty and performance chemicals, is working with Nomura as it explores a sale, two sources familiar with the situation said.

The sale process is in the second round, these sources said, with one of them noting that management presentations are on-going for the Ambler, Pennsylvania-based chemicals company. The auction is seeing interest from financial sponsors, they added.

GEO generates around USD 30m in EBITDA, the same sources and an additional source familiar with the situation said.

The valuation is likely to be a high single digits EBITDA multiple, the first source familiar and a sector advisor said, as GEO is a mash-up of different assets. But the second source familiar said that a 7x EBITDA range is more likely, as the business is commoditized and the chemistry of the business is not unique.

The same source noted the company just settled a civil antitrust lawsuit in January. GEO and other water treatment chemical companies were defendants in more than 40 civil antitrust suits relating to the sale of aluminum sulfate.

GEO manufactures, markets, and supplies specialty chemicals for customers in the US and internationally. The company also provides paints and coatings products, water treatment chemicals, specialty and construction chemicals as well as additives for concrete admixtures, synthetic rubber polymerization and gypsum processing.

GEO and Nomura did not respond to requests for comment.

GEO Specialty Chemicals acquired by CPS Performance (Arsenal Capital)