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New Mountain Capital's Avantor to buy lab supplies company VWR

  • Avantor, a laboratory supplies company, said it would buy VWR Corp. in a deal with an enterprise value of about $6.4 billion.

Private-equity firm New Mountain Capital's Avantor will but VWR Corp. for about $4.38 billion, creating a global lab equipment giant supplying everything from beakers to microscopes to the health-care and technology industries.

The deal combines Avantor's strength in manufacturing and its presence in emerging markets with VWR's distribution network in the Americas and Europe, the companies said.

Avantor, formed in August 2010 when New Mountain Capital purchased the business from Covidien, manufactures materials and chemicals for the biopharma industry.

VWR, a company that traces its roots to the California Gold Rush in the 1850s, was bought by Madison Dearborn Partners in 2007 and went public in October 2014.

Avantor's offer of $33.25 per share in cash represents a discount of 2.3 percent to VWR's Thursday close. VWR's shares were down 3.4 percent at $32.90 before the bell on Friday.

The company's shares have risen 19.4 percent since May 2, the day before the Wall Street Journal first reported the companies were nearing a deal.

The companies said the deal reflects an enterprise value of about $6.4 billion.

For New Mountain Capital, the deal adds heft to its health-care portfolio, which includes companies ranging from contact lens supplier ABB Optical to medical data firm Ciox Health.

"This may be a strategic acquisition for New Mountain, in line with a "deep dive" strategy where it aims to build a portfolio presence in a few niche sectors, including health care," William Blair's Amanda Murphy wrote in a client note on Thursday.

Avantor Chief executive Michael Stubblefield will lead the combined company, while New Mountain Capital will continue to be the lead shareholder, the companies said on Friday.

Goldman Sachs, Jefferies and Barclays are the financial advisers to Avantor, while Simpson Thacher & Bartlett is the legal adviser.

Bank of America/Merrill Lynch advised VWR, while Kirkland & Ellis was the legal adviser.

CORRECTION: This story was updated to show VWR was bought by Madison Dearborn Partners, not Madison Capital Partners.