Avantor, a portfolio company of New Mountain Capital, has agreed to acquire publicly traded VWR in an all cash transaction valued at $6.4 billion. VWR is one of the two largest distributors of equipment and consumable supplies to the laboratory sector across all industries with a #2 US market share and a #1 market share in Europe.
VWR (NASDAQ:VWR) distributes more than 2 million products to the government, biotechnology, life science, education, electronics and pharmaceutical sectors. Products include chemicals, reagents, consumables, durable products, and scientific equipment & instruments. The company also provides custom manufacturing of buffers, reagents, active pharmaceutical ingredients, high purity ingredients, ultra-pure acids, and other chemicals used in biopharmaceutical and industrial applications, and production processes. The company was founded in the late 1920s by George Van Waters and Nat Rogers as a small chemical company. Today, VWR has approximately 10,200 employees and is headquartered near Philadelphia in Radnor, PA (www.vwr.com).
Varietal Distribution Holdings is the largest shareholder of VWR and is comprised of a number of investors including Madison Dearborn Partners which has been a significant shareholder of VWR since it acquired the company from Clayton, Dubilier & Rice in 2007.
Following the closing of the acquisition, which is expected in the third quarter of 2017, New Mountain Capital will be the lead shareholder of the combined company and Madison Dearborn will have no equity interest in the company. “We believe this combination creates significant value for all stakeholders including customers, partners and the employees. 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,” said Matt Holt, Managing Director at New Mountain Capital.
Avantor is a manufacturer of materials and chemicals used in pharmaceutical, biopharmaceutical, laboratory, research and electronics applications. The company’s product line includes more than 30,000 SKUs marketed around the world under several brand names including J.T.Baker, Macron Fine Chemicals, BeneSphera, Rankem, Diagnova and POCH brands. The company has approximately 10,000 customers in over 100 countries. Avantor is headquartered near Philadelphia in Center Valley, PA and has other manufacturing sites located in Phillipsburg, NJ; Paris, KY; The Netherlands; Mexico; Poland; and India (www.avantorinc.com). New Mountain acquired Avantor, then called Mallinckrodt Baker, from Covidien (formerly Tyco Healthcare), in 2010.
Avantor’s acquisition of VWR will create a major consumables-focused provider of products and services to the life sciences and advanced technologies industries, as well as education, government, and research institutions across the globe. “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,” said Michael Stubblefield, Chief Executive Officer of Avantor. “Collectively, this will create a larger, stronger and more diversified company with significantly enhanced scale and product breadth.”
New Mountain currently manages over $15 billion of private and public equity funds. The firm is an industry generalist but has specific expertise in education, health care, software, business services, logistics, specialty chemicals, federal services, media, consumer products, financial services and insurance, environmental services, infrastructure and energy. New Mountain was founded in 1999 and is headquartered in New York (www.newmountaincapital.com).
Madison Dearborn Partners invests in privately held or publicly traded companies in the following sectors: financial and transaction services; business and government services; health care; basic industries; consumer; and telecom, media and technology services. In August 2016 the firm closed its seventh buyout fund at $4.4 billion. Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).
Goldman Sachs, Jefferies, and Barclays are acting as financial advisors to Avantor, and BofA Merrill Lynch is the financial advisor to VWR. Fully committed financing of the acquisition has been provided by Goldman Sachs, Barclays, and Jefferies.
© 2017 Private Equity Professional | May 8, 2017
