Avantor (a leading global provider of life sciences products and services) announced the signing of a definitive agreement to divest its clinical services business, including kitting, biorepository, and related equipment and ancillaries (clinical services) to Audax Private Equity, for a deal value of approximately $650 million.

The clinical services business has about 800 employees and is part of Avantor's Laboratory Solutions segment. And it is expected to generate approximately $200 million of annual revenue in 2024. The deal is expected to close in the fourth quarter of 2024, subject to regulatory approvals and other customary closing conditions.

Avantor believes that this transaction will result in about $475 million in after-tax cash proceeds and a reduction of approximately $50 million in capitalized leases.

Avantor plans to utilize the after-tax proceeds for debt paydown, which further strengthens the Company's balance sheet and reduces interest expense.

J.P. Morgan Securities is serving as Avantor's exclusive financial advisor in connection with the transaction, and Arnold & Porter is serving as Avantor's legal advisor. Moelis & Company is serving as financial advisor to Audax and Ropes & Gray LLP provided legal counsel to Audax.

KEY QUOTES:

"(This) announcement is an important step for Avantor as we continue to optimize our portfolio in line with our new operating model. The divestiture enables us to enhance our focus on strategic growth opportunities in our lab and production businesses, while strengthening our balance sheet."

"In Audax, we are pleased to have found a new owner that recognizes the value proposition of this business and is ideally positioned to invest and grow the platform for the benefit of all stakeholders."