Aceto Corp. will sell its chemicals unit to a private equity firm in Manhattan for $411 million , subject to a bankruptcy court hearing on Tuesday, officials said.
Aceto, which is headquartered in Port Washington, announced Monday night that New Mountain Capital was the successful bidder in a court auction where another, higher bid was received. This led New Mountain to increase its initial bid, made in February, of $338 million.
The second bidder was LBB Specialties Intermediate Holding Company LLC, a chemicals business in Manhattan, according to a securities filing made Tuesday. Aceto's chemicals division primarily supplies farmers and manufacturers.
“After receiving a qualified offer from another bidder reflecting higher and/or otherwise better terms, a court-supervised sale process was held on April 12,” Aceto said in a news release. “Ultimately, New Mountain Capital was selected as the successful bidder.”
The sale is the subject of a hearing Tuesday in U.S. Bankruptcy Court in Newark, New Jersey. If approved, the transaction is expected to close by month's end, according to the securities filing.
Andre Moura, managing director of New Mountain, said the private equity firm will “help the [chemicals unit] to realize its full growth potential by scaling capabilities in key markets and investing in new organic and inorganic initiatives.”
This is the second of two auction sales of Aceto’s assets as part of a Chapter 11 bankruptcy filing in February.
Last week, the company announced court approval for the sale of its struggling generic drugs unit to an India-based drugmaker for $15 million. Rising Pharmaceuticals Inc. in New Jersey was bought by Shore Suven Pharma Inc.
Rising’s inability to compete with larger rivals and problems in delivering products led to a cash crunch at Aceto. The parent also had amassed debt to acquire and expand Rising in the past eight years.
Aceto shares were delisted from the Nasdaq stock market earlier this month. They now trade on the Over-The-Counter Pink Sheet market.