Vertellus Debuts

Arsenal Capital Partners has folded Reilly Industries and Rutherford Chemicals together into a new chemical company called Vertellus Specialties. Arsenal acquired Rutherford from Cambrex in 2003 and the family-held Reilly in 2005. It will retain ownership of Vertellus.

Vertellus, which has its headquarters in Indianapolis, is made up of three divisions. The largest, agricultural and nutrition specialties, is the world's leading provider of pyridine and α-, β-, and γ-picolines and is the second largest producer of vitamin B-3. Its products go into pesticides, human and animal nutrition products, and agricultural chemical catalysts.

The second unit is health and specialty products, making specialty pyridine derivatives, N,N-diethyl-m-toluamide (DEET) insect repellant, sulfones, alkenyl succinic anhydrides, and reducing agents. The third division is performance materials, which provides castor polymer additives and systems and citrate polymer additives and systems.

Projected 2006 revenue for the new firm is about $400 million. Arsenal separately owns several other chemical-related assets, including specialty chemical maker Velsicol Chemical, acquired last year, and pharmaceutical ingredient producer Scientific Protein Laboratories.

The chairman of the new company will be Robert D. McNeeley, currently Reilly's CEO. Timothy J. Zappala, now CEO of Rutherford, will be president and CEO.

Vertellus is not going to stand still, according to Barry Siadat, managing director of Arsenal. "Vertellus is in a good growth, good margin segment of the industry. We're going to invest in growth. What you will see now are acquisitions of technology and businesses, and we're expanding facilities. It is an investing/growth strategy that we're going to pursue."

Siadat does not rule out an initial public offering, sale, or other exit from the business if the opportunity arises. "Right now, the public markets are not exciting," he says. "We're always looking at those kinds of opportunities, but there are no plans yet." Besides, he says, "we're just putting the company together."