Avid Bioservices, a biologics-focused contract development and manufacturing organisation (CDMO), has agreed to be acquired by GHO Capital Partners and Ampersand Capital Partners in an all-cash deal worth around $1.1bn.
The CDMO provides process development, CGMP clinical, and commercial manufacturing services for the biotechnology and biopharmaceutical industries.
Its services cover CGMP drug manufacturing, bulk packaging, testing, and regulatory support, along with early-stage process development activities such as cell line development and analytical testing.
Avid Bioservices’ offerings extend from individual process development projects to development and manufacturing programmes through to commercialisation.
In September, the company released its Q1 FY2025 results, with revenue of $40.2m, a 6% increase over the previous year, driven by higher process development revenue. Gross profit rose to $5.7m, with a margin of 14%, up from $4.1m and 11% in Q1 FY2024.
Its order backlog grew 16% to $219m, with a significant portion expected to be recognised as revenue over the next five quarters.
GHO Capital Partners managing partners Alan MacKay and Mike Mortimer said: “Our mission at GHO is to make healthcare better, faster, and more accessible and at the heart of this is enabling efficient, high-quality manufacturing of innovative treatments.
“Avid exemplifies this perfectly – the Company operates in high-growth markets, producing complex biologics for leading pharmaceutical and biotech innovators at both the clinical and commercial stages. Avid’s recent investments, both in capacity and its exemplary team, position it strongly for future growth.”
Under the terms of the agreement, GHO Capital Partners and Ampersand Capital Partners will acquire all outstanding shares of the Nasdaq-listed Avid Bioservices at $12.5 per share. This per-share price offers a premium of 13.8% over the CDMO’s closing share price of $10.98 on 6 November 2024, the final trading day before the announcement.
Additionally, the purchase price reflects a 21.9% premium on Avid Bioservices’ 20-day volume-weighted average share price up to 6 November 2024.
Upon completion of the deal, the CDMO’s shares will cease to be publicly traded, though the company will continue to operate under the same name and brand.
Avid Bioservices president and CEO Nick Green said: “After years of investment and expansion, now is the right time to move forward as a private company with new owners that will support our next phase.
“In evaluating this transaction, our Board considered a range of alternatives and determined that it provides our stockholders significant, immediate and certain cash value for their shares.
“Partnering with GHO Capital and Ampersand Capital Partners allows us to build on our strong foundation by accessing their significant knowledge base, network and capital to position the business for the future with our customers.”
The deal is expected to conclude in Q1 2025, pending customary closing conditions such as shareholder approval and regulatory clearance.
Moelis & Company is serving as Avid Bioservices’ exclusive financial adviser, and Cooley is providing legal counsel. William Blair & Company and Ropes & Gray are acting as financial and legal advisers, respectively, to GHO Capital Partners and Ampersand Capital Partners.
