Activist Investor to Push Avantor to Make Changes or Sell Itself
Engine Capital has a roughly 3% stake in the life-sciences company
- Engine Capital has taken a 3% stake in Avantor and may reveal it on Monday.
- Engine believes Avantor should pursue an immediate sale or make changes, such as refreshing the board.
- Avantor’s stock has dropped nearly 50% this year, giving it a market value of $7.8 billion.
Activist investor Engine Capital has built a stake in Avantor AVTR 1.05%increase; green up pointing triangle and plans to push the life-sciences company to sell itself or make other changes, according to people familiar with the matter.
The details
The investment firm could reveal its roughly 3% stake in Avantor on Monday, the people said.
Radnor, Pa.-based Avantor sells lab equipment and supplies used by life-sciences companies and others. The company has a market value of about $7.8 billion after its shares fell nearly 50% so far this year.
Engine believes the company should either pursue an immediate sale or make changes that could include a board refresh, increased stock buybacks, cost cuts or selling noncore parts of its business, the people said.
Engine thinks the entire company could sell for between $17 and $19 a share, according to the people. Shares closed Friday at $11.50.
The investment firm also believes shares could trade as high as $26 apiece by the end of 2027 if the company were to make the necessary changes on its own, the people added.
The context
Demand for Avantor’s products has dropped, especially in the government and education sectors, due to research funding cuts by the Trump administration. Its shares were already on a downward slide when the company announced the departure of its longtime chief executive officer in April, which caused them to drop further.
Avantor made its debut on the public market in 2019 after being owned by private-equity firm New Mountain Capital.
Engine was founded in 2013 by Arnaud Ajdler. It launched a proxy fight at ride-share company Lyft earlier this year, but withdrew its nominees after Lyft agreed to expand its share buyback program.