Case Study - Acquisition of a Non-Core Division of a Larger Corporation


CERILLIANT CORPORATION

Round Rock, Texas

Cerilliant is a global leader in analytical reference standards providing certified reference materials to the diagnostic / clinical, forensic / toxicology, environmental, and pharmaceutical industries.

Seller Need: The seller, a NYSE listed company, decided to divest its interest in a small non-core division. There was limited stand-alone financial information, no in-house accounting, HR or other administration capabilities and the facility needed to be relocated. Management of the division sought an investment partner who would support their efforts to extricate them from their prior relationship with their parent and become an independent company.

Transaction: In August 2000 Argenta Partners acquired Cerilliant from URS Corporation, a large engineering and services company.

Role: We assisted in establishing all of the administrative and accounting functions and acquired and then leased to the company a substantially larger and highly-equipped facility designed specifically to meet the needs of the business. We assisted in bringing to Cerilliant a new Chief Executive Officer, a new Controller, a revised strategic focus, a more effective marketing program and other improvements to the operation.

Outcome: Argenta Partners completed the sale of Cerilliant Corporation to Sigma-Aldrich Corporation (Nasdaq: SIAL) on December 30, 2010. Sigma-Aldrich was motivated by the opportunity to strengthen the Company’s analytical chemistry product portfolio and to continue to deliver on its strategic growth targets in the analytical chemistry sector. The successful exit generated a gain of 27 times the initial equity investment and produced an IRR of 38%.

As viewed by the CEO:

“Argenta Partners was extremely valuable in getting Cerilliant established as a stand-alone business. Their early involvement allowed us to get a lot accomplished without adding significant additional resources. They provided assistance in everything from setting up employee benefit programs to selecting accounting software to providing ongoing financial and tax preparation support. This included bringing the banking relationship as part of the acquisition. Argenta was also particularly helpful in writing and negotiating legal contracts — something the management team could not have done without spending significant resources on lawyers and consultants.

Throughout our long relationship, Argenta Partners has continually supported the growth of the business through reinvestment of earnings, and has acted as a sounding board on the critical decisions of the business. Their extensive and continued support to the business has contributed to much of the success we enjoy today.”

 

Sherri Pogue, CEO
Cerilliant Corporation