Avantor, controlled by the private equity firm New Mountain Capital, has reached an agreement to buy VWR for $6.4 billion. The deal will create a global supplier of lab equipment, including autosamplers, office furniture, chromatography media, and reagents.
The acquisition combines Avantor, a minnow among laboratory supply firms with about $700 million in annual sales together with VWR, a whale in the industry with $4.5 billion in sales. It continues a trend of consolidation among laboratory suppliers.
Madison Dearborn Partners, a private equity firm that controls about one-third of VWR’s shares, has agreed to vote its shares in favor of the merger. New Mountain says it will continue as lead shareholder of the new entity.
Avantor CEO Michael Stubblefield will lead the combined firm. “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,” he says.
The combined entity will be in a better position to compete in a consolidating industry. Germany’s Merck KGaA, for instance, created a lab supply powerhouse with its 2015 acquisition of Sigma-Aldrich for $17 billion. Merck now has annual sales of lab products exceeding $6 billion. Honeywell recently beefed up its lab chemicals business with the purchase of an inorganics and solvents business orphaned in the Sigma-Aldrich transaction.
VWR, which traces its roots back 160 years, employs more than 10,000 people and operates out of 170 facilities in 34 countries. Besides distributing lab products, including some Avantor-manufactured lab chemicals, VWR has been beefing up its portfolio of chemicals over the past two years by acquiring companies such as reagents maker Seastar Chemicals and active pharmaceutical ingredients maker Reliable Biopharmaceuticals.
Avantor was created when New Mountain bought Mallinckrodt Baker from medical supply firm Covidien in 2010. Avantor has made a number of acquisitions since 2010 including the pharmaceutical buffers maker Puritan Products and RFCL an Indian supplier of laboratory reagents and consumables.