The billionaire investor is among those backing Novalent’s durable surface antimicrobial technology
By Jeff Sheban
Billionaire Sam Zell is among a group of savvy investors backing a small North Carolina biotechnology engineering company that has developed what it believes is a breakthrough product: a disinfectant that kills bacteria on surfaces and creates a barrier to additional contamination for up to 90 days.
“It changes the way of thinking about cleaning and disinfecting,” said President and CEO Kevin Parrish, with potential uses not only in food and beverage production settings but also in schools, offices and hospitals. Protecting surfaces from additional contamination for up to three months is what distinguishes this product from potential alternatives, he said.
“For 100 years the way we fought germs is the instant kill; we’ve never had a layer that continuously protects the surface against germs,” the CEO told Mergermarket. PepsiCo has been using Novalent to disinfect its Aquafina water bottling equipment for more than 12 months now, he said.
The Greensboro-based company started life as IndusCo, founded by scientists holding patents for a water-based antimicrobial that the founders believed was perfect for eliminating odors in underwear, socks and other textiles. Hanes gave it a shot, but IndusCo remained a niche player.
In early 2017, a group of Australian private equity executives with food industry investments got wind of the technology. They, along with veteran New Zealand food industry executive Ron Vela, acquired a majority stake in the business and rebranded it as Novalent.
“We never anticipated COVID-19; it was just a food-safety play,” said Vela, who previously ran the largest division of Australia’s Goodman Fielder, a multinational baked goods and snack company, where he oversaw 52 food production facilities in five countries.
Zell, through his personal investment vehicle Equity Group Investments, bought into the business a year later.
Vela, Zell and the others have poured more than $20 million into Novalent for R&D and to commercialize the technology, and are actively raising additional investor funds. In 2019, Novalent received U.S. Environmental Protection Agency approval for use of the antimicrobial on food-contact surfaces.
To say that Novalent was in the right place at the right time when COVID-19 emerged as a global pandemic in early 2020 would seem to be a no-brainer. So why aren’t company officials shouting from the rooftops that they are in possession of a silver bullet that could potentially protect factories, hospitals, schools and public transit systems from the surface spread of COVID-19?
Because they can’t – at least not yet. Novalent officials and investors have asked the EPA to certify that the disinfectant not only protects against germs and bacteria, but also against viruses.
“We are working directly with the EPA, and we hope to have that approval within three-to-six months,” Parrish said. Until that time, no such claims are being made.
Meanwhile, Novalent has developed a non-alcohol-based hand sanitizer that, when applied, provides protection of up to 24 hours against the spread of germs to be used in commercial and industrial settings. The company is in talks with various pharmacy chains and retailers about carrying a consumer version of the product, which recently launched in Australia.
Vela, who is one of the wealthiest New Zealanders, admits to being excited about Novalent as an investment vehicle, but also sees it as more.
“The financial aspect is clearly very large, but it also feels like a very good thing to be a part of,” he said. “I have a 90-year-old father who lives down the road and needs to remain safe. We’re going to have to be cognizant [of COVID-19] forever, or at least for a very long time.”
Jeff Sheban is a Midwest-based journalist for Mergermarket. He can be reached at jeff.sheban@acuris.com.