FOLLOW US

Life sciences tools company Avantor Inc. has announced plans to sell its clinical services business to Audax Private Equity for $650 million, with both parties represented by top law firms. Avantor, advised by Arnold & Porter Kaye Scholer LLP, disclosed the sale on Friday, marking a significant move in its strategy to optimize its portfolio.

Audax to Acquire Avantor Clinical Services : Details of the Acquisition

The clinical services business, which is a part of Avantor's laboratory solutions segment, employs approximately 800 people and includes operations such as kitting, biorepository services, and related equipment and ancillaries. The business is projected to generate around $200 million in annual revenue in 2024.

"Today's announcement 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. He emphasized that the divestiture allows Avantor to focus on strategic growth opportunities within its lab and production businesses while also strengthening its financial position.

Audax to Acquire Avantor Clinical Services : Audax’s Strategic Investment

Audax Private Equity, advised by Ropes & Gray LLP, expressed strong confidence in the acquisition. The clinical services business operates 10 facilities across the U.S., U.K., and Europe and maintains a global logistics and equipment services network. This network assists clients in managing complex supply chain needs, a critical component in the life sciences and pharmaceutical industries.

David Wong, a partner at Audax, highlighted the value proposition of the acquired business: "We appreciate the unique capabilities that this business delivers to some of the most demanding customers in the pharma and life sciences sectors, and we look forward to investing aggressively to expand the company's commercial and technical reach."

Financial and Strategic Impact

Avantor expects to net approximately $475 million in after-tax cash proceeds from the sale, which it plans to use to pay down debt. This move is aimed at strengthening Avantor’s balance sheet and reducing interest expenses, positioning the company for further strategic investments.

The acquisition is being executed through Audax's flagship private equity fund, with the deal expected to close in the fourth quarter of the year, subject to regulatory approvals and customary closing conditions.

Legal Teams Involved

Avantor's legal team from Arnold & Porter was led by corporate partners Marisa White and Derek Stoldt, with support from tax partner Laurie Abramowitz, antitrust partner Debbie Feinstein, and benefits partner Henry Clinton-Davis. On the other side, Audax was represented by a Ropes & Gray team that included private equity partner Chau Le, finance partner Greg Bauer, healthcare partner Michael Lampert, life sciences regulatory and compliance partner Josh Oyster, tax partner Pamela Glazier, employment partner Megan Bisk, executive compensation and employee benefits partner Jennifer Rikoski Whitney, and real estate partner Peter Alpert.