Biopharma supplier Avantor is offloading its clinical services unit to Audax Private Equity for $650 million.
The clinical services business is made up of 800 workers and includes kitting, biorepository and related ancillaries. The Avantor arm is expected to bring in annual revenue of $200 million for this year, according to a company press release.
The sale is slated to close in the last quarter of 2024 and total around $475 million in after-tax cash proceeds for Avantor.
"Today's announcement is an important step for Avantor as we continue to optimize our portfolio in line with our new operating model," Avantor President and CEO Michael Stubblefield said in the company release. "The divestiture enables us to enhance our focus on strategic growth opportunities in our lab and production businesses, while strengthening our balance sheet."
Avantor’s revised operating model was implemented at the beginning of this year and splits the business into two global segments: laboratory solutions and bioscience production. The clinical services unit was part of the lab solutions sector.
The global supplier plans to allocate the money from the sale to paying off debt and reducing interest expenses.
In the second quarter of this year, Avantor’s net sales decreased 2.4% compared to the same quarter in 2023, according to a July 26 release.