Avantor® Closes Previously Announced Divestiture of its Clinical Services Business
Rhea-AI Summary
Avantor (NYSE: AVTR) has closed the divestiture of its clinical services business to Audax Private Equity for approximately $650 million. The transaction is expected to yield $500 million in after-tax cash proceeds and reduce capitalized leases by about $50 million. Avantor plans to use the proceeds to pay down debt.
CEO Michael Stubblefield stated that this move will strengthen the company's balance sheet, reduce interest expenses, and allow focus on strategic growth in lab and production businesses. J.P. Morgan Securities and Arnold & Porter LLP advised Avantor, while Moelis & Company and Ropes & Gray LLP advised Audax in the transaction.
Positive
- Divestiture valued at approximately $650 million
- Expected $500 million in after-tax cash proceeds
- Reduction of approximately $50 million in capitalized leases
- Proceeds to be used for debt reduction
- Strengthening of balance sheet and reduction of interest expenses
Negative
- Potential loss of revenue stream from clinical services business
News Market Reaction 1 Alert
On the day this news was published, AVTR declined 0.16%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
"This transaction not only strengthens our balance sheet and reduces interest expense, but also enables us to sharpen our focus on strategic growth opportunities in our lab and production businesses," said Michael Stubblefield, President and Chief Executive Officer. "We extend our gratitude to the associates transferring with the business for their invaluable contributions and wish them continued success as they embark on this new chapter under Audax's ownership."
J.P. Morgan Securities LLC served as Avantor's exclusive financial advisor in connection with the transaction and Arnold & Porter LLP served as Avantor's legal advisor. Moelis & Company LLC served as financial advisor to Audax and Ropes & Gray LLP provided legal counsel to Audax.
About Avantor
Avantor® is a leading life science tools company and global provider of mission-critical products and services to the life sciences and advanced technology industries. We work side-by-side with customers at every step of the scientific journey to enable breakthroughs in medicine, healthcare, and technology. Our portfolio is used in virtually every stage of the most important research, development and production activities at more than 300,000 customer locations in 180 countries. For more information, visit avantorsciences.com and find us on LinkedIn, X (Twitter) and Facebook.
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, including our cost transformation initiative, objectives, future performance and business. These statements may be preceded by, followed by or include the words "aim," "anticipate," "assumption," "believe," "continue," "estimate," "expect," "forecast," "goal," "guidance," "intend," "likely," "long-term," "near-term," "objective," "opportunity," "outlook," "plan," "potential," "project," "projection," "prospects," "seek," "target," "trend," "can," "could," "may," "should," "would," "will," the negatives thereof and other words and terms of similar meaning.
Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct. Factors that could contribute to these risks, uncertainties and assumptions include, but are not limited to, the factors described in "Risk Factors" in our most recent Annual Report on Form 10-K, and subsequent quarterly reports on Form 10-Q, as such risk factors may be updated from time to time in our periodic filings with the SEC.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this press release. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.
Global Media Contact
Eric Van Zanten
Head of External Communications
Avantor
610-529-6219
Eric.VanZanten@avantorsciences.com
Investor Relations Contact
Christina Jones
Vice President, Investor Relations
Avantor
805-617-5297
Christina.Jones@avantorsciences.com
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SOURCE Avantor and Financial News
FAQ
What is the value of Avantor's clinical services business divestiture?
How much after-tax cash proceeds does Avantor expect from the divestiture?
How will Avantor use the proceeds from the clinical services business sale?
Who acquired Avantor's clinical services business?
What is the expected impact on Avantor's capitalized leases?
