Avantor, Inc. (NYSE: AVTR) recently signed a definitive agreement to divest its clinical services business, including kitting, biorepository, and related equipment and ancillaries (collectively known as Clinical Services), to Audax Private Equity (Audax). The transaction is expected to close in the fourth quarter of 2024, subject to regulatory approvals and other customary closing conditions.
The clinical services business is currently part of Avantor's Laboratory Solutions segment.
Avantor's management plans to discuss the divestiture on its third-quarter 2024 earnings conference call.
The divestiture is expected to enable the company to enhance its focus on strategic growth opportunities in its lab and production businesses while strengthening its balance sheet.
Rationale Behind the Divestiture
Avantor expects the transaction to result in approximately $475 million in after-tax cash proceeds and a reduction of approximately $50 million in capitalized leases. Management intends to utilize the after-tax proceeds for debt paydown, which will likely strengthen the company's balance sheet and reduce interest expenses.
Per management, the agreement is an important step for ...
