RADNOR, PA — Avantor, Inc. (NYSE: AVTR) has announced a definitive agreement to sell its clinical services business to Audax Private Equity for approximately $650 million. This business includes kitting, biorepository, and related equipment and ancillaries.
“[This agreement] is an important step for Avantor as we continue to optimize our portfolio in line with our new operating model,” said Michael Stubblefield, President and CEO of Avantor. “The divestiture enables us to enhance our focus on strategic growth opportunities in our lab and production businesses, while strengthening our balance sheet.”
Mr. Stubblefield added, “In Audax, we are pleased to have found a new owner that recognizes the value proposition of this business and is ideally positioned to invest and grow the platform for the benefit of all stakeholders.”
The clinical services business is part of Avantor’s Laboratory Solutions segment and employs about 800 people. It is expected to generate approximately $200 million in annual revenue by 2024. The transaction is projected to close in the fourth quarter of 2024, subject to regulatory approvals and customary closing conditions. Avantor expects the transaction to yield around $475 million in after-tax cash proceeds and reduce capitalized leases by approximately $50 million.
Proceeds from the sale will be used for debt reduction, further solidifying Avantor’s financial standing and reducing interest expenses. Avantor will provide more details about this divestiture during its third-quarter 2024 earnings call.
J.P. Morgan Securities LLC is serving as Avantor’s exclusive financial advisor, while Arnold & Porter is acting as legal advisor for Avantor. Moelis & Company LLC is advising Audax Private Equity, with legal counsel from Ropes & Gray LLP.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.