H.I.G. Capital Completes the Sale of BIOVECTRA

Rhea-AI Summary

H.I.G. Capital has announced the sale of its portfolio company, BIOVECTRA Inc., to Agilent Technologies, Inc. (NYSE: A) for $925 million. BIOVECTRA, a leading contract development and manufacturing organization (CDMO) of active pharmaceutical ingredients and intermediates, is headquartered in Charlottetown, Prince Edward Island, Canada. The company has approximately 650 employees and eight facilities with over 270,000 square feet of space.

H.I.G. acquired BIOVECTRA in November 2019 and successfully established it as an independent organization. Under H.I.G.'s ownership, BIOVECTRA strengthened its executive management team, completed three major facility build-outs, and significantly grew its sales pipeline while focusing more on commercial products. These strategic initiatives resulted in an industry-leading growth profile and an outstanding outcome for shareholders.

Positive

• Sale of BIOVECTRA to Agilent Technologies for $925 million
• Successful establishment of BIOVECTRA as an independent organization
• Completion of three major facility build-outs
• Significant growth in sales pipeline
• Shift in business profile to focus more on commercial products
• Achievement of industry-leading growth profile

Negative

• None.

Insights

Financial Analyst

The $925 million acquisition of BIOVECTRA by Agilent Technologies represents a significant transaction in the CDMO space. This deal highlights the growing importance of contract manufacturing in the pharmaceutical industry. For Agilent (NYSE: A), this acquisition expands their capabilities in biologics and API production, potentially boosting their revenue streams and market position.

The exit appears successful for H.I.G. Capital, though without specific financial details, it's challenging to quantify the return on investment. The strategic initiatives implemented during H.I.G.'s ownership, including facility expansions and a shift towards commercial products, likely contributed to BIOVECTRA's valuation. For Agilent shareholders, this acquisition could drive long-term growth, but may impact short-term financials due to the substantial purchase price.

Pharmaceutical Industry Expert

This acquisition underscores the increasing consolidation and vertical integration within the pharmaceutical supply chain. BIOVECTRA's expertise in biologics and highly potent APIs aligns with industry trends towards complex, targeted therapeutics. Agilent's move to acquire BIOVECTRA demonstrates a strategic push into higher-value CDMO services, potentially allowing them to capture more of the drug development and manufacturing value chain.

The deal could enhance Agilent's competitive position against other major CDMOs and integrated pharmaceutical service providers. However, the integration of BIOVECTRA's operations and culture will be important for realizing the full potential of this acquisition. The $925 million price tag suggests Agilent sees significant growth potential in BIOVECTRA's capabilities and client relationships.

Market Research Analyst

The CDMO market has been experiencing robust growth, driven by pharmaceutical companies' increasing outsourcing of drug development and manufacturing. This acquisition positions Agilent to capitalize on this trend, particularly in the high-growth areas of biologics and potent compounds. The transaction value of $925 million for a company with 650 employees suggests a premium valuation, reflecting the strategic importance of BIOVECTRA's capabilities and market position.

For investors, this move signals Agilent's commitment to expanding its life sciences portfolio and could lead to enhanced revenue growth and margins in the medium to long term. However, the integration process and the need to justify the acquisition price may put pressure on Agilent's financials in the short term. The market's reaction to this news will be important to watch, as it may impact Agilent's stock performance in the coming weeks.

MIAMI--(BUSINESS WIRE)-- H.I.G. Capital ("H.I.G."), a leading global alternative investment firm with $65 billion of capital under management, is pleased to announce the sale of its portfolio company, BIOVECTRA Inc. (“BIOVECTRA” or the “Company”), a leading contract development and manufacturing organization (CDMO) of active pharmaceutical ingredients and intermediates, to Agilent Technologies, Inc. (NYSE: A) for a purchase price of $925 million.

Headquartered in Charlottetown, Prince Edward Island, Canada, BIOVECTRA has approximately 650 employees and eight facilities with over 270,000 square feet of facility space. The Company produces biologics, highly potent active pharmaceutical ingredients, and other molecules for targeted therapeutics.

H.I.G. acquired BIOVECTRA in November 2019 and successfully established the Company as an independent, standalone organization. H.I.G. supported the Company in strengthening the executive management team, successfully completing three major facility build-outs, and growing the sales pipeline significantly while shifting the Company’s business profile to focus more on commercial products. Due to these strategic initiatives, the Company achieved an industry-leading growth profile, resulting in an outstanding outcome for shareholders.

Oliver Technow, BIOVECTRA’s CEO, commented, “Today is a testament to the reputation BIOVECTRA has built as a trusted partner with our marquis roster of clients and to our efforts to continuously grow our service offering, ultimately better serving patients’ lives. We are grateful for H.I.G.'s role in our success these past five years and are excited to further build on this success with Agilent through this synergistic pairing.”

Mike Gallagher, Managing Director at H.I.G., commented, “The BIOVECTRA team has consistently done an exceptional job at executing value-added strategic initiatives, and we have been pleased to support them throughout our partnership to become a leader in the pharma CDMO space. We believe Agilent is a first-class organization that will help BIOVECTRA grow to even greater heights.”

Scott Zhu, Managing Director at H.I.G., added, “It has been a privilege to collaborate with Oliver and the entire BIOVECTRA team. Their hard work and commitment have driven exceptional growth, and we are proud to have helped them enhance their capabilities during this pivotal phase. We look forward to following the team’s continued success.”

Moelis & Company LLC, Morgan Stanley & Co. LLC, and RBC Capital Markets, LLC, were financial advisors to H.I.G.

About BIOVECTRA

Headquartered in Charlottetown, Prince Edward Island, Canada, BIOVECTRA is a contract development and manufacturing organization for key ingredients used in branded drugs to treat a broad range of complex diseases. The Company has over 650 employees and eight facilities in Charlottetown, Prince Edward Island and Nova Scotia, with over 270,000 square feet of facility space. Its processes and capabilities are uniquely designed to support its clients from the early stages of clinical development to scale-up and commercial manufacturing. For more information, please visit biovectra.com.

About H.I.G. Capital

H.I.G. is a leading global alternative investment firm with $65 billion of capital under management.* Based in Miami, and with offices in Atlanta, Boston, Chicago, Los Angeles, New York, and San Francisco in the United States, as well as international affiliate offices in Hamburg, London, Luxembourg, Madrid, Milan, Paris, Bogotá, Rio de Janeiro, São Paulo, Dubai, and Hong Kong. H.I.G. specializes in providing both debt and equity capital to middle market companies, utilizing a flexible and operationally focused/value-added approach:

• H.I.G.’s equity funds invest in management buyouts, recapitalizations, and corporate carve-outs of both profitable as well as underperforming manufacturing and service businesses.
• H.I.G.’s debt funds invest in senior, unitranche, and junior debt financing to companies across the size spectrum, both on a primary (direct origination) basis, as well as in the secondary markets. H.I.G. also manages a publicly traded BDC, WhiteHorse Finance.
• H.I.G.’s real estate funds invest in value-added properties, which can benefit from improved asset management practices.
• H.I.G. Infrastructure focuses on making value-add and core plus investments in the infrastructure sector.

Since its founding in 1993, H.I.G. has invested in and managed more than 400 companies worldwide. The Firm’s current portfolio includes more than 100 companies with combined sales in excess of $53 billion. For more information, please refer to the H.I.G. website at hig.com.

*Based on total capital raised by H.I.G. Capital and affiliates.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240923272694/en/

Mike Gallagher

Managing Director

mgallagher@hig.com

Scott Zhu

Managing Director

szhu@hig.com

Alex Zisson

Managing Director

azisson@hig.com

1450 Brickell Avenue

31^st Floor

Miami, FL 33131

P 305.379.2322

hig.com

Source: H.I.G. Capital

FAQ

What is the purchase price for BIOVECTRA in the sale to Agilent Technologies (NYSE: A)?

Agilent Technologies (NYSE: A) is acquiring BIOVECTRA for a purchase price of $925 million.

How many employees and facilities does BIOVECTRA have?

BIOVECTRA has approximately 650 employees and eight facilities with over 270,000 square feet of facility space.

When did H.I.G. Capital acquire BIOVECTRA?

H.I.G. Capital acquired BIOVECTRA in November 2019.

What strategic initiatives did H.I.G. Capital implement at BIOVECTRA?

H.I.G. Capital strengthened the executive management team, completed three major facility build-outs, grew the sales pipeline, and shifted the business profile to focus more on commercial products.