Avantor to divest clinical services business for $650m

Avantor has agreed to sell its clinical services business to Boston-based investor Audax Private Equity for $650 million.

The business provides a range of kitting, biorepository, and equipment-related services to clinical research organizations and drug trial sponsors. It operates ten facilities across the US, UK, and Europe. It also maintains a global logistics and equipment services network to help its clients manage complex and evolving supply chain needs.

The unit has approximately 800 employees and is part of Avantor’s Laboratory Solutions segment. It is expected to generate approximately $200 million of annual revenue in 2024. The transaction is expected to close in the fourth quarter of 2024.

CEO Michael Stubblefield said the sale is part of a wider effort to optimize the firm’s portfolio in line with its 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.”

He said Audax would be an “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."

Avantor expects to generate $475 million from the deal, which it intends to utilize for debt paydown.

Investment plan

Stephen Weaver, managing director at Audax Private Equity, said, “The investments we intend to make to this platform should deliver tremendous benefits to our clients and our team members.”

This was echoed by David Wong, partner at Audax Private Equity, who said, “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. We believe the services this business provides represents the backbone for advancing therapeutic development.”

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