Avantor plans to acquire VWR for approximately $6.4 billion cash, in a deal the companies said today would create a combined global provider of consumables-focused solutions and services to life sciences and advanced technologies businesses, as well as education, government, and research institutions.
The deal is designed to enable the combined company to serve customers from research through production by joining Avantor’s strengths in cGMP manufacturing processes and significant exposure to emerging markets with VWR’s focus on providing product and service solutions to laboratory and production customers in the Americas and Europe.
“Collectively, this will create a larger, stronger, and more diversified company with significantly enhanced scale and product breadth,” stated Avantor CEO Michael Stubblefield, who will lead the combined company. “Avantor and VWR share a dedication to enabling the advancement of science worldwide and a commitment to quality, safety, innovation, and customer service.”
Avantor is owned by private equity firm New Mountain Capital, which will continue as lead shareholder of the combined company.
The deal follows a quarter in which VWR expanded through three acquisitions, all for undisclosed sums. On April 7, VWR acquired MESM, a provider of laboratory and medical equipment and ancillary supplies to clinical trials worldwide.
In March, VWR bought global biorepository services organization EPL Archives for an undisclosed sum in March. And 2 months earlier in January, VWR snapped up Seastar Chemicals, a manufacturer of high-purity reagents used in the global research, laboratory, and microelectronics industries, for an undisclosed price.
“Given the changing dynamics in the highly fragmented and diverse life sciences sector, we believe that combining Avantor’s advanced materials and solutions with VWR’s unparalleled distribution capabilities and breadth of offerings represents a compelling value proposition,” added VWR president and CEO Manuel Brocke-Benz.
The boards of both companies have approved the deal, which is expected to close in the third quarter, subject to VWR shareholder approval and other conditions that include expiration of a “go-shop” period, the expiration or termination of the applicable waiting period under Hart–Scott–Rodino Antitrust Improvements Act, and European Commission approval.
VWR’s officers and directors, as well as its largest shareholder, Varietal Distribution Holdings, have agreed to support the deal. Together they represent approximately 34.8% of VWR’s total issued and outstanding shares of common stock.
At $33.25 a share, the purchase price represents an approximately 17% premium to VWR’s closing share price on Tuesday, the day before speculation surfaced publicly about a potential sale of VWR. The purchase price also represents an approximately 20% premium to the 30 trading day volume weighted average price (VWAP), and an approximate 24% premium to the 90 trading day VWAP of VWR common stock as of Tuesday.
Separately, VWR said it finished the first quarter with net income of $38.5 million—down nearly 1% from the year ago quarter following the three acquisitions—on net sales of $1.14 billion, up 3.7% year over year, and up 4.3% on an organic basis. VWR also reported operating income of $81.5 million, up 2% from Q1 2016
VWR said it will no longer provide or update financial guidance to investors.