Avid Bioservices to exit public market with GHO and Ampersand buyout

In a transformative shift within the biopharmaceutical manufacturing sector, Avid Bioservices, a premier biologics contract development and manufacturing organization (CDMO), has announced its agreement to be acquired by GHO Capital Partners and Ampersand Capital Partners for approximately $1.1 billion. This acquisition, valued at $12.50 per share, will take Avid Bioservices private, marking a major shift in its operational landscape.

Critical Details and Going Private Implications

GHO Capital Partners and Ampersand Capital Partners will acquire all publicly traded shares of Avid Bioservices at a premium price, leading to the company’s delisting from the public markets. The offer, set at $12.50 per share, presents a 13.8% premium over Avid’s last closing share price of $10.98 on November 6, 2024. Expected to close in early 2025, the move to go private is anticipated to allow Avid Bioservices greater flexibility in its strategic planning and long-term goals, away from the scrutiny and pressures of public shareholders.

Impact on Avid Bioservices’ Growth and Strategy

Industry experts predict that the transition to a private entity will enable Avid Bioservices to implement its growth strategies more aggressively, without the regulatory constraints typical of publicly traded companies. The infusion of resources from GHO and Ampersand, both seasoned investors in healthcare, could empower Avid to broaden its manufacturing capabilities, develop more specialized services, and potentially explore high-growth sectors within biologics and advanced therapeutics.

Market Reactions and Investor Confidence

With news of the acquisition, Avid Bioservices’ stock saw a 12% uptick, closing at $12.25 on November 8, 2024, reflecting investor confidence in the value of this buyout. Financial analysts noted that Avid’s shift to a private company structure could enable it to focus on longer-term projects that may not yield immediate returns but promise substantial impact in the future.

GHO Capital Partners and Ampersand Capital Partners: A Strong Private Equity Backing

London-based GHO Capital Partners and Boston’s Ampersand Capital Partners bring robust healthcare sector expertise to the table, which industry insiders suggest will be instrumental for Avid Bioservices as it scales its biologics manufacturing capabilities. Both firms’ backgrounds in healthcare investment could guide Avid in addressing the rising global demand for biologics manufacturing solutions.

The Future as a Private Entity

As Avid Bioservices delists, its leadership is likely to refocus on expanding capacity and adopting advanced technologies, potentially including new therapies in biologics. Analysts believe that the company’s private status will allow for more agile decision-making and targeted growth, aligning with the broader vision of its new private equity owners.

With Avid Bioservices set to go private in a $1.1 billion deal, this acquisition signifies a pivotal moment in the CDMO industry. The transition not only enables strategic freedom for Avid but also reflects a broader trend of private equity-driven growth in healthcare sectors, particularly in specialized manufacturing. Industry experts agree that this move positions Avid to leverage GHO and Ampersand’s resources, benefiting its operational goals and, ultimately, its clients.