Blog Coverage: VWR Corp. Acquired by Performance Materials Company Avantor
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LONDON, UK / ACCESSWIRE / May 8, 2017 / Active Wall St. blog coverage looks at the headline from Radnor, Pennsylvania based VWR Corp. (NASDAQ: VWR) as the Laboratory Product and Solutions Company announced on May 05, 2017, that it has signed an agreement to be acquired by Center Valley, Pennsylvania based and privately owned Company Avantor Inc. Avantor is owned by New York-based private equity firm New Mountain Capital, since 2010. The all-cash transaction has an enterprise value of approximately $6.4 billion. Register with us now for your free membership and blog access at:
One of VWR Corp.'s competitors within the Medical Laboratories & Research space, Bio-Rad Laboratories, Inc. (NYSE: BIO), reported on May 04, 2017, its financial results for Q1 ended March 31, 2017. AWS will be initiating a research report on Bio-Rad Labs in the coming days.
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Commenting on the acquisition, Michael Stubblefield, CEO of Avantor, said:
"Avantor's acquisition of VWR is both highly compelling and complementary. 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. Collectively, this will create a larger, stronger and more diversified Company with significantly enhanced scale and product breadth."
Manuel Brocke-Benz, President and CEO of VWR added:
"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."
Matt Holt, Managing Director of New Mountain Capital shared:
"The combined Company will have a strong position as a vertically integrated, global player in manufacturing and supply chain solutions for the life sciences, advanced technologies, and research industries."
Details of the transaction
According to the agreement signed by the Companies, Avantor will pay $33.25 in cash for each VWR's common share. The offer price at a 17% premium to the closing stock price of VWR's share on May 02, 2017, the day before the rumors of the deal started doing the rounds.
The Boards of Directors of both Companies have already approved the deal. Varietal Distribution Holdings, LLC, which is the majority shareholder in VWR with approximately 34.8% stake in VWR, has signed a voting agreement to vote in favor of the acquisition. Varietal Distribution Holdings consists of Madison Dearborn Partners (which has been a large shareholder of VWR since 2007) and some officers and directors of VWR. The transaction is expected to close in Q3 2017 and is subject to the expiration or termination of the applicable waiting period under Hart-Scott-Rodino Antitrust Improvements Act, approval from European Commission, anti-trust regulators, VWR's shareholders as well as certain closing conditions.
Once the transaction is completed, New Mountain Capital will be the largest shareholder in the combined Company. MDP will cease to hold any shares after the finalization of the acquisition. Michael Stubblefield, the current CEO of Avantor, will continue to be at the helm of the new merged entity.
Benefits of the Acquisition
Avantor is a global supplier of high-purity materials for the life sciences and advanced technology industries. Avantor's product portfolio includes more than 30,000 products and supplies approximately 7,900 customers across the biotechnology, pharmaceutical, medical device, diagnostics, aerospace & defense, and semiconductor industries across the globe. It has 10 manufacturing facilities around the world including cGMP manufacturing facilities in US, Europe, and India.
VWR, on the other hand, is a global provider of product and service solutions to laboratory and production customers. VWR offers innovative, flexible and customized solutions from scientific research services to custom-manufactured chemical blends. It is supported by a strong team of 9,300 associates who help scientists, medical professionals, and production engineers to achieve their goals. The Company recorded sales of over $4.3 billion in FY15. VWR also disclosed its financial results for Q1 2017 on May 05, 2017. It reported net sales for the quarter were $1.14 billion and GAAP diluted EPS was $0.29.
With the acquisition of VWR, Avantor will emerge as one of the major supplier of lab related products, equipment and services, including autosamplers, office furniture, chromatography media, and reagents etc. The merged entity will be able to significantly expand its market share and compete with industry majors like Merck KGaA, Honeywell, etc. The merged entity will be a vertically integrated organization that covers the entire gamut of the target customers' requirements and area of activities, starting from research to production.
The deal brings together VWR's huge distribution and marketing network, especially in markets like America and Europe, with Avantor's capabilities in cGMP manufacturing processes.
Strong acquisition background
Both Companies have a strong acquisitions strategy and used the same to reach their current positions. VWR has made three major acquisitions within the first few months in FY17. In April 2017, VWR acquired MESM Ltd., a supplier of laboratory and medical equipment and ancillary supplies. In March 2017, VWR acquired EPL Archives, Inc., a global biorepository services organization. In January 2017, VWR acquired Seastar Chemicals Inc, a manufacturer of high-purity reagents used in the global research, laboratory, and microelectronics industries. VWR did not disclose the financial details of any of these deals.
On the other hand, this is Avantor's second acquisition in FY17. Earlier in April 2017, Avantor had acquired Puritan Products, Inc. a product and solutions provider for biopharma, research and electronic materials customers. The financial details were, however, not disclosed.
Stock Performance
On Friday, May 05, 2017, the stock closed the trading session at $33.28, slipping 2.26% from its previous closing price of $34.05. A total volume of 17.11 million shares have exchanged hands, which was higher than the 3-month average volume of 945.10 thousand shares. VWR Corp.'s stock price surged 20.62% in the last month, 28.84% in the past three months, and 21.46% in the previous six months. Furthermore, on a year to date basis, the stock soared 32.96%. Shares of the company currently have a market cap of $4.39 billion and have a PE ratio of 29.61.
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