Avid Bioservices Acquired in $1.1B Deal by Private Equity Firms

Deal News | Nov 07, 2024 | EIN

Avid Bioservices Acquired in $1.1B Deal by Private Equity Firms

Avid Bioservices, a contract development manufacturing organization specializing in biologic drugs, is set to transition to a privately held entity following an acquisition deal valued at $1.1 billion. The acquirers, GHO Capital Partners and Ampersand Capital Partners, are opting to pay $12.50 per share in cash, representing a 13.8% premium on the previous closing price, and a 21.9% premium over the 20-day average closing price. Avid, which originated as a subsidiary of Peregrine Pharmaceuticals, has shifted its focus from drug R&D to CDMO services. Despite reporting a revenue decline for fiscal year 2024 to $139.9 million, Avid successfully attracted the interest of the private equity firms due to its strategic position within the biologics CDMO sector. GHO Capital and Ampersand Capital have extensive experience in the life sciences sector, with prior collaborative ventures in the CDMO space. The acquisition is approved by Avid's board but awaits shareholder sanctioning, with completion anticipated in Q1 2025, at which point Avid will maintain its branding and operations.

Sectors

  • Biotechnology
  • Private Equity

Geography

  • United States – Avid Bioservices is based in Tustin, California, making the United States a key geographical focus for this acquisition.
  • Transatlantic – GHO Capital Partners has a transatlantic focus, indicating operations and collaborations likely extend across the Atlantic, affecting various geographical locations.

Industry

  • Biotechnology – Avid Bioservices operates in the biotechnology sector, specifically in the field of biologic drugs manufacturing and contract development.
  • Private Equity – GHO Capital Partners and Ampersand Capital Partners, the buyers in this transaction, are prominent players in the private equity sector.

Financials

  • $1,100,000,000 – Acquisition deal valuation for Avid Bioservices.
  • $12.50 – Cash payment per Avid share based on the acquisition agreement.
  • 13.8% – Premium on the closing stock price of Avid shares.
  • 21.9% – Premium on Avid's average stock price over the prior 20 days.
  • $139.9 million – Reported revenue of Avid for the fiscal year ended April 30, 2024.
  • $26.9 million – Net loss reported by Avid for fiscal 2024.
  • 6.3 – The multiple of estimated fiscal 2025 revenue represented by the purchase price.

Participants

NameRoleTypeDescription
Avid BioservicesTargetCompanyA contract development manufacturing organization specializing in biologic drugs, transitioning to private ownership.
GHO Capital PartnersBuyerCompanyA private equity firm with a focus on healthcare innovation and strong presence in the CDMO sector.
Ampersand Capital PartnersBuyerCompanyA private equity firm with over three decades of experience concentrating on the life sciences sector.
Peregrine PharmaceuticalsFormer Parent CompanyCompanyThe former parent company of Avid Bioservices, focused on antibody drugs for cancer before transitioning solely to CDMO activities under Avid.