IPO for lab supplier Avantor raises $4.2 billion

The laboratory supply house Avantor raised $4.2 billion in its May 16 initial public offering of stock. The IPO was this year’s second largest so far; only the ride-hailing service Uber raised more money, about $8 billion, in its May 9 offering.

The IPO will allow Avantor to continue its role as a consolidator in the drug research and life sciences markets. Talking on Bloomberg TV the day after the stock sale, Avantor CEO Michael Stubblefield said the firm now has the “flexibility to invest more aggressively” in its innovation and acquisition strategy.

According to the firm, about $1.6 billion of the IPO’s proceeds will be used to reduce its debt of about $7 billion. New Mountain Capital, the private equity firm that launched Avantor in 2010, will continue to be Avantor’s largest shareholder with a 25% stake valued at about $1.5 billion.

New Mountain started Avantor with the $280 million purchase of Mallinckrodt Baker, a small but respected supplier of laboratory chemicals with annual sales of about $400 million. With advice from former Rohm and Haas CEO Raj Gupta, who is now Avantor’s chair, the firm bought a series of lab and high-purity chemical specialists, including US-based Puritan Products, India’s RFCL, and Poland’s POCH.

Two years ago, Avantor made its biggest move with the $6.4 billion purchase of the lab supplier VWR. The acquisition gave it the heft to compete head-on with other major lab providers such as MilliporeSigma, Thermo Fisher Scientific, and Eppendorf. In 2018, Avantor had sales of $5.9 billion and a net loss of $87 million. It has about 12,000 employees.