Building on a solid year of growth in the life sciences sector with the more than $1 billion acquisition of German robotics manufacturer Ritter? "Ja, bitte!" says Avantor.
Avantor—a Fortune 500 producer of lab testing materials and research equipment for use in biopharma, healthcare, education and government settings—will acquire Ritter for €890 million, or about $1.06 billion U.S., in an all-cash transaction.
The deal spans all of Ritter’s assets and affiliates, including its more than 40,000 square meters of specialized manufacturing facilities.
The acquisition is expected to close early in the third quarter of the year. After that, Pennsylvania-based Avantor will dole out up to €300 million ($358 million) more through 2023 as Ritter and its affiliates reach certain milestones.
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Once the transaction is complete, Avantor will fold the production of Ritter’s liquid handling and robotic consumables into its own lab automation workflow offerings, adding new capabilities for clinical diagnostics, drug discovery and other life sciences research.
With Ritter’s positioning in a market estimated to be worth $7 billion, Avantor expects to achieve a return on its investment in the company of at least 10% within five years, according to an April 12 investor presentation detailing the buy.
“The acquisition of Ritter marks the next step in the ongoing transformation of Avantor,” Michael Stubblefield, Avantor’s president and CEO, said in a release. "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," Stubblefield continued.
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The acquisition is Avantor’s first since the company went public in May 2019. Its IPO grossed approximately $3.3 billion, making it that year’s seventh-highest IPO.
Since then, the more than century-old company has seen consistent sales growth, with a growing focus on the life sciences sector. In 2020, Avantor reported net sales of almost $6.4 billion, for a year-over-year increase of 5.8%.
The vast majority came from the life sciences sector, where Avantor focused approximately 70% of its business in 2020, according to an investor presentation. In the fourth quarter alone, the company unveiled two new lab technology offerings and a controlled-release HIV drug delivery system.