GTCR, InterTech see huge profit in $1.1bn exit

The sale of Polypore to Warburg Pincus generates a 30-times return on investment.

Chicago powerhouse GTCR Golder Rauner, in partnership with private investment firm The InterTech Group, has agreed to sell filtration products portfolio company Polypore to Warburg Pincus for a reported $1.1 billion (€880 million).

 

GTCR and South Carolina-based InterTech made their initial investment in Polypore in 1994 with just $15 million in equity. The original deal was structured as a battery separator division spinout from WR Grace & Co.

 

Polypore, with facilities throughout North America, Europe and Asia, makes specialised “microporous” filtration products used in power storage, healthcare, electronics, transportation and specialty technology industries, according to a press release. The company’s products are of particular application in the production of batteries.

 

Frank Nasisi will become the Polypore’s chief executive officer. Nasisi was an executive at Daramic, the first of three main Polypore units. Following Daramic’s spinout from WR Grace, GTCR and InterTech acquired two additional related companies, Charlotte, North Carolina-based Celgard and Wuppertal, Germany-based Membrana.

 

Because Daramic managed to pay down much of its nearly $70 million in debt resulting from the buyout, GTCR and InterTech were able to make the add-on acquisitions using debt only, according to GTCR senior principal David Donnini.

 

InterTech Group is controlled by Jerry Zucker, the former CEO of Polymer Group, a North Carolina maker of “non-woven” materials.

 

Warburg Pincus’ Kewsong Lee is leading the Polypore acquisition for the firm.

 

This is Warburg Pincus’ second major acquisition in a week and GTCR’s second major exit announcement in roughly the same time period.

 

Yesterday, Warburg Pincus agreed to buy Irish packaging group Clondalkin from Candover for €630 million ($783 million).

 

Late last month, GTCR announced the sale of CuraScript Pharmacy to publicly traded Express Scripts for approximately $335 million in cash. CuraScript, a pharmacy services company, was formed in 2000 through a management buyout with GTCR valued at $41.3 million.

 

Last June, GTCR closed a $1.85 billion fund.