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VWR deal will create more diversified company - Avantor

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By Joe Whitworth+

05-May-2017
Last updated on 05-May-2017 at 15:45 GMT2017-05-05T15:45:38Z

©iStock/SergZSV
©iStock/SergZSV

Avantor is to acquire VWR for $6.4bn to boost its position in the ‘high-growth’ life sciences sector.

The supplier of ultra-high-purity materials said the deal would create a ‘major’ consumables-focused provider to the life science industry as well as education, government and research institutions worldwide.

The acquisition will build on Avantor's cGMP manufacturing processes and emerging market focus and VWR's position across the Americas and Europe.

It is expected to close in the third quarter of 2017 with New Mountain Capital as the lead shareholder of the combined company. Financing was provided by Goldman Sachs, Barclays and Jefferies LLC.

VWR opened a 226,000 square foot chemical manufacturing site in Ohio last year.

The provider of products and services to laboratory and production customers has a manufacturing facility in Solon which supports customers who produce various kits and reagents for use in food and beverage testing.

It also serves as a contract manufacturer for companies who have developed molecular based technologies used in foodborne pathogen testing. 

Creation of a ‘more diversified’ company

The agreement follows the approval by the board of directors of VWR and Avantor.

Michael Stubblefield, CEO of Avantor, said the move would create a larger, stronger and more diversified company with enhanced scale and product breadth.

“We will bring together our well-known expertise in ultra-high-purity materials and customized solutions with VWR's global scale, unparalleled channel access, and deep customer relationships,” he said.

“The global customers that we plan to serve in a more high-touch manner will immediately benefit from the combination, as we will provide end-to-end solutions that offer increased quality, effectiveness, and productivity."

“We look forward to welcoming VWR's more than 10,000 employees to Avantor and to our continued success as one team upon the successful completion of the transaction."

Avantor's portfolio includes more than 30,000 products and 7,900 customers across the biotechnology, pharmaceutical, medical device and diagnostics industries.

Jefferies acted as financial advisor to Avantor in the acquisition. It represents Jefferies’ sixth transaction for the firm since June 2016.

Changing dynamics in life sciences sector

Manuel Brocke-Benz, president and CEO of VWR, said the new organization would serve the growing needs of laboratory and production customers globally.

“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.”

VWR acquired Seastar, a manufacturer of high purity reagents used by research customers in January; EPL Archives, an archive and biorepository services firm in March and MESM, a company providing equipment supply and ancillary consumables for customers in clinical trials in April.

The firm was named as the distributor for the DuPont BAX System Q7 instrument, assays and related products in 2015.

DuPont Diagnostics is now Hygiena, after the Warburg Pincus portfolio company acquired all product lines, including the BAX System and dehydrated culture media last year.

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