8-K/A: Avid Bioservices Acquired by GHO Capital and Ampersand Capital Partners for $1.1 Billion, Delisting from Nasdaq

Avid Bioservices has been acquired by funds managed by GHO Capital and Ampersand Capital Partners in an all-cash transaction valued at approximately $1.1 billion, leading to its delisting from Nasdaq.

Summary

• Avid Bioservices has been acquired by funds managed by GHO Capital Partners LLP and Ampersand Capital Partners in a deal valued at approximately $1.1 billion.
• The merger was completed on February 5, 2025, with Avid Bioservices becoming a wholly-owned subsidiary of Space Finco, Inc., owned by funds managed by affiliates of GHO Capital Partners LLP and Ampersand Capital Partners.
• As a result of the merger, each share of Avid Bioservices common stock was converted into the right to receive $12.50 in cash.
• The company's common stock has ceased trading and will be delisted from Nasdaq.
• Holders of Avid's 7.00% Convertible Senior Notes due 2029 have the right to require the company to repurchase their notes for cash at 100% of the principal amount plus accrued interest on March 12, 2025.
• Noteholders who convert their notes during a specified period following the merger will receive an increased conversion rate.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the successful acquisition, the potential for future growth, and the immediate cash value provided to stockholders. The involvement of experienced investors like GHO Capital and Ampersand Capital Partners further contributes to the positive outlook.

Positives

• The acquisition provides Avid Bioservices with access to resources that will accelerate its growth.
• GHO Capital and Ampersand Capital Partners have deep experience in the CDMO sector.
• The merger provides immediate cash value to Avid Bioservices stockholders at $12.50 per share.
• Noteholders have the option to have their notes repurchased or convert them at an increased rate during a specified period.

Negatives

• Avid Bioservices' common stock has ceased trading and will be delisted from Nasdaq.
• Former stockholders no longer have equity ownership in the company.
• There is a limited window for noteholders to convert their notes at the increased Make-Whole Conversion Rate.

Risks

• The success of Avid Bioservices will now depend on the strategies and management of its new owners, GHO Capital and Ampersand Capital Partners.
• Failure to convert Notes during the Make-Whole Fundamental Change Conversion Period will result in a loss of the right to convert Notes at the increased Make-Whole Conversion Rate.

Future Outlook

Avid Bioservices is poised for significant growth with new partners GHO Capital and Ampersand Capital Partners, including expanded offerings, talent investment and greater geographic reach.

Management Comments

• Nick Green, President and CEO of Avid, said: 'Avid has succeeded by evolving and adapting to meet our customers' complex development and manufacturing needs. The completion of this transaction marks an exciting milestone as we move forward with new owners in GHO Capital and Ampersand who will provide us with access to resources that will accelerate our growth. With their support, we are well-positioned to enhance our capabilities, expand our service offerings, and deliver even greater value to our customers in this next phase of our journey.'
• Alan MacKay and Mike Mortimer, Managing Partners of GHO, commented: 'We are delighted to start 2025 with the completion of this transaction, our first public to private deal. GHO has a deep understanding of the CDMO sector and Avid perfectly exemplifies a company that is operating in high growth markets supporting the growing biotech sector in research and development and big pharma and large biotech for the commercialisation of cutting-edge biologics. Avid's recent investments, both in capacity and its exemplary team, have created a strong foundation for future growth. We look forward to partnering closely with the Avid team to unlock the businesss full potential.'
• David Anderson, General Partner of Ampersand, added: 'Avid has earned its reputation as a leader in biopharmaceutical development and manufacturing through technical excellence, customised solutions, and consistent regulatory compliance. By combining our deep industry expertise with Avid's established capabilities, we are positioned to deliver enhanced value and accelerate innovation for clients globally.'

Industry Context

The acquisition reflects the ongoing consolidation and investment in the CDMO sector, driven by the increasing demand for biologics manufacturing and the need for specialized expertise and capacity.

Comparison to Industry Standards

• GHO Capital's investments in companies like Ardena, Sterling Pharma Solutions, RoslinCT, and Alcami Corporation demonstrate a strategy of expanding technological capabilities and driving acquisitions in the CDMO value chain.
• Ampersand Capital Partners' focus on growth-oriented investments in the healthcare sector aligns with the industry trend of private equity firms investing in CDMOs to enhance their services and market reach.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders received $12.50 per share in cash.
• Employees may experience changes as the company integrates with its new owners.
• Customers can expect enhanced capabilities and service offerings.
• Suppliers may see changes in procurement strategies under the new ownership.
• Creditors are subject to the terms of the Indenture and the First Supplemental Indenture.

Next Steps

• Delisting of Avid Bioservices' common stock from Nasdaq.
• Repurchase or conversion of the 7.00% Convertible Senior Notes due 2029.
• Integration of Avid Bioservices into the portfolios of GHO Capital and Ampersand Capital Partners.
• Implementation of growth strategies by the new owners, including expanded offerings, talent investment, and greater geographic reach.

Key Dates