Sterling Organics

Manufacturers of fine chemical intermediates for the pharmaceutical and agro-chemical industries.


When, in 1995, the management of Sterling Organics heard that their business was about to change hands, they looked for backing from Montagu, having been advised of our experience in the fine chemicals sector.

Sterling manufactured fine chemical intermediates for the pharmaceutical and agro-chemical industries and was based in the North East at Dudley near Newcastle-upon-Tyne.

The company sourced raw materials from bulk chemical producers and manufactured fine chemicals using a wide range of chemical processes. These processes were performed under stringently controlled conditions in reactor vessels. The company had the ability to upscale a chemical reaction from experiments in the laboratory involving a few grams, to pilot plant facilities, which were much like those used by world class pharmaceutical companies.

Only three months after the Management Buyout had been completed, Sterling was in negotiations with the US pharmaceutical company SepraChem, with a view to a merger to form ChiRex. The merger gave management the opportunity of enhancing the long term future of their business by broadening the company's product base. Montagu had expected to remain a long term investor in Sterling, but, like management, believed the ChiRex merger looked too good an opportunity to miss. ChiRex Inc. was subsequently listed on Nasdaq, at a value of US$146 million (€234 million)

Few deals are realised this quickly. However, in this case the merger and subsequent flotation secured a strong future for the company and its management, and resulted in outstanding returns for the investors.

Deal details

Deal type: Management Buyout Investment Year: 1995 Country: United Kingdom Status: Realised Value: £40 million Industry Sector: Healthcare, Industrials