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Scoop: Code Hennessy Plots Exit of GSE Environmental

After seven years, Code Hennessy & Simmons is preparing to exit GSE Environmental, two sources say.

Code Hennessy, a Chicago PE firm, is considering a dual track strategy for GSE. It is currently interviewing bankers for a sale of the company and an IPO, the sources say. Any transaction will likely occur later this year, one person says.

Houston-based GSE provides something called “geosynthetic liners” which includes geomembranes, geonets and geosynthetic clay liners. If that doesn’t clarify everything, GSE membranes are used as liners in landfills to prevent leakage and groundwater contamination. The liners are also used on farms for animal waste containment.

One banker said any deal was likely small since GSE was up for sale before and didn’t find a buyer. It was unclear when this attempted auction occurred.

Code Hennessy, which now calls itself CHS Capital, acquired GSE in 2004 in a $242 million deal. The PE firm invested about $61 million equity, according to SEC filings. The investment came from the firm’s fourth fund, Code Hennessy & Simmons IV LP, which raised $1 billion in 1999.

CHS invests in companies with an enterprise value between $75 million to $500 million. The PE firm focuses on consumer and business services, distribution, as well as the industrial, infrastructure and energy sectors.

Officials for GSE and Code Hennessy could not be reached for comment.