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Sterigenics: Transformation Through Organic Growth and Strategic Acquisitions

March 29, 2016

As a result of GTCR’s history of investing in outsourced business services, combined with the firm’s proactive efforts and domain expertise in the medical device industry, GTCR has pursued businesses that provide specialized services essential to the manufacture and marketing of healthcare products. GTCR identified contract sterilization as an attractive industry that exhibited a range of favorable attributes, including a market structure with underlying volume and pricing growth and attractive margins.

In 2011, the firm pursued and eventually acquired Sterigenics, the leading global provider of contract sterilization services to the medical device industry, operating 38 facilities across North America, Europe and Asia. Sterigenics offered all three major sterilization modalities and a full suite of value-add services across its broad network of strategically-located facilities. Sterigenics also had a strong reputation for providing high-quality, cost-effective and customized solutions. Based on extensive diligence, GTCR believed that Sterigenics was well positioned to capitalize on consistent industry growth fueled by increasing med tech procedure volumes and continued outsourced sterilization trends.

As part of the Sterigenics transaction, GTCR partnered with Michael Mulhern, who joined as CEO shortly after closing. Together, GTCR and Mr. Mulhern identified several initiatives to improve Sterigenics’ operational and growth initiatives, enhance its market leadership and drive incremental earnings growth. Michael added key management, upgraded systems and SOPs and methodically optimized customer contracting and facility utilization to expand capacity, unit economics and quality standards.

In addition to organic initiatives, GTCR and management also strategically repositioned the business through three acquisitions, including two sterilization facility add-ons and the transformative acquisition of Nordion, a key supplier to Sterigenics. Nordion was a global science company providing radioactive cobalt used for gamma sterilization of medical devices and a portfolio of medical isotopes for clinical use in healthcare facilities. The vertical integration of Nordion secured the supply of a critical raw material to Sterigenics sterilization services, and the facility acquisitions broadened the Company’s geographic footprint.

After completing the acquisition and integration of Nordion, GTCR began to assess various strategic alternatives. In May 2015, the firm completed a recapitalization of the business with Warburg Pincus, a global private equity firm. GTCR is excited to remain in partnership with Michael Mulhern and the senior management team to execute against the Company’s future initiatives.