Avantor (AVTR) Buying Ritter In €890 Million Deal

By Amit Chowdhry ● April 12, 2021
  • Avantor Performance Materials, Inc. (NYSE: AVTR) is buying Ritter GmbH and its affiliates in an all-cash transaction with an upfront equity purchase price of approximately €890 million. These are the details.

Avantor Performance Materials, Inc. (NYSE: AVTR) — a leading global provider of mission-critical products and services to customers in the life sciences and advanced technologies & applied materials industries — announced that it has entered into a definitive agreement to acquire privately-held Ritter GmbH and its affiliates in an all-cash transaction with an upfront equity purchase price of approximately €890 million subject to final adjustments at closing and additional payments based on achieving future business performance milestones. 

Based in Schwabmünchen, Germany, Ritter is the fastest growing manufacturer of high-quality robotic and liquid handling consumables, including conductive tips engineered to exacting standards. And these consumables are used in a variety of molecular screening and diagnostic applications, including real-time polymerase chain reaction (PCR), non-molecular assays such as immunoassays, emerging high-throughput in vitro diagnostics (IVD) technologies including next-generation sequencing, and as part of drug discovery and clinical trial testing in pharma and biotech applications. These applications combined represent a nearly $7 billion addressable market with attractive long-term growth potential.

Ritter’s high-precision manufacturing footprint includes 40,000 square meters of specialized production space and 6,000 square meters of ISO Class 8 cleanrooms – which provides significant capacity for continued growth. And much of Ritter’s current business is focused on serving diagnostic system providers and liquid handling OEMs. The geographic and commercial reach of Avantor’s global channel and deep customer access will significantly enhance its revenue potential and provide broader aftermarket opportunities.

This deal utilizes Avantor’s track record of M&A success with transactions that range in size from small tuck-ins to large, transformational acquisitions. And since 2011, the company has successfully completed 40 transactions, deployed more than $8 billion in capital and generated well over $350 million in EBITDA synergies.

The deal is expected to be immediately accretive to adjusted earnings per share (EPS) upon closure and is anticipated to enhance Avantor’s revenue growth and margin profile. And Avantor expects to finance the all-cash transaction with available cash on hand and use of incremental term loans. The company expects that its adjusted net leverage ratio at closing will approximate 4.1x net debt to pro forma LTM adjusted EBITDA, with rapid deleveraging thereafter.

The deal is expected to be completed in the third quarter of 2021, and is subject to customary conditions, including receipt of applicable regulatory approvals.

KEY QUOTES:

“The acquisition of Ritter marks the next step in the ongoing transformation of Avantor. The combination will significantly expand our proprietary offering to the biopharma and healthcare end markets and significantly enhance Avantor’s offerings for critical lab automation workflows. Our combined businesses also share similar characteristics including a highly recurring, specification-driven revenue profile and a consumable-driven portfolio of products produced to exacting standards that enhances our unique customer value proposition.”

“We look forward to adding Ritter’s highly skilled team members in Germany and Slovenia to the Avantor family. Similar to Avantor, Ritter serves highly regulated, specification-driven applications and relies on a collaboration-based innovation model to serve its customers. Both companies share a strong culture of innovation and excellence, as well as a clear commitment to sustainability.”

— Michael Stubblefield, President and CEO of Avantor

“This proposed transaction helps both parties, as well as existing and new customers. Avantor’s broad portfolio is used by thousands of scientists and laboratories in virtually every stage of the most important research, development and production activities. We are excited about combining our high-precision products and state-of-the-art manufacturing capabilities with Avantor’s global reach and strong passion for achieving scientific breakthroughs.”

— Johannes von Stauffenberg, CEO of Ritter