DEFA14A: Avid Bioservices Urges Stockholders to Vote FOR Acquisition by GHO and Ampersand

Avid Bioservices reminds stockholders to vote in favor of the proposed acquisition by GHO Capital Partners LLP and Ampersand Capital Partners at the special meeting scheduled for January 30, 2025.

Summary

• Avid Bioservices has mailed a letter to stockholders urging them to vote FOR the pending transaction with GHO Capital Partners LLP and Ampersand Capital Partners.
• The special meeting to vote on the transaction is scheduled for January 30, 2025, with stockholders of record as of December 11, 2024, eligible to vote.
• Independent proxy advisory firms ISS and Glass Lewis recommend voting FOR the transaction, citing the significant, immediate, and certain cash value it delivers to stockholders.
• The transaction offers a 63.8% premium to Avid's closing price of $7.63 on June 4, 2024, prior to the initial proposal from GHO and Ampersand.
• The board conducted a robust process, engaging with 24 strategic and financial parties, with seven conducting diligence under NDA and two submitting preliminary bids.
• The board rejected two initial proposals before engaging in further discussions with GHO and Ampersand.
• The transaction de-risks Avid's future as a standalone company, considering industry-wide uncertainty and the need for additional investments.
• Financial analysis indicates that Avid's growth prospects as a public company were below previous guidance and analysts' consensus.
• Moelis & Company LLC is serving as Avid's exclusive financial advisor, and Cooley LLP is serving as legal counsel.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment regarding the proposed acquisition, highlighting the benefits for stockholders and the thoroughness of the process. The recommendation from ISS and Glass Lewis further reinforces this positive outlook.

Positives

• The proposed transaction offers a significant premium to Avid's stock price.
• Independent proxy advisory firms recommend voting in favor of the transaction.
• The transaction provides immediate and certain cash value to stockholders.
• The board conducted a thorough process to maximize stockholder value.
• The transaction de-risks Avid's future as a standalone company.

Negatives

• Avid's growth prospects as a public company were below previous guidance and analysts' consensus.
• The company needs additional investments to capitalize on its growth potential.

Risks

• The timing, receipt, and terms of required governmental and regulatory approvals could delay or cause abandonment of the transaction.
• Events, changes, or circumstances could lead to termination of the merger agreement.
• Stockholders may not approve the proposed transaction.
• Parties may not be able to satisfy the conditions to the transaction in a timely manner.
• The transaction could disrupt management time from ongoing business operations.
• Announcements relating to the transaction could adversely affect the market price of Avid's common stock.
• Unexpected costs or expenses could result from the transaction.
• Litigation relating to the transaction could arise.
• The transaction could adversely affect the ability to retain and hire key personnel and maintain relationships with stakeholders.

Future Outlook

The document focuses on the proposed acquisition of Avid Bioservices by GHO and Ampersand and does not provide specific forward-looking statements about Avid's future operations beyond the completion of the transaction.

Management Comments

• The Avid Bioservices Board of Directors unanimously recommends that Avid Stockholders Vote FOR the proposed transaction with GHO and Ampersand.
• The letter reiterates the significant, immediate and certain cash value the transaction delivers to Avid stockholders, the robust process conducted by the Avid Board of Directors to maximize stockholder value, and the de-risking of Avid's future as a standalone company for stockholders.

Industry Context

The document mentions industry-wide uncertainty and challenges facing the biologics manufacturing industry, suggesting that the acquisition provides a more stable path forward for Avid Bioservices compared to remaining a standalone company. The document also mentions comparable publicly traded companies including Bachem, Catalent, Lonza, Oxford Biomedica and PolyPeptide.

Comparison to Industry Standards

• The document compares the premium offered to the trading multiples of comparable publicly traded companies such as Bachem, Catalent, Lonza, Oxford Biomedica and PolyPeptide.
• The 24.9% premium to the midpoint of the company's discounted cash flow analysis is significantly higher than the consensus of its peers.

Stakeholder Impact

• Stockholders are expected to receive significant, immediate, and certain cash value.
• The transaction aims to de-risk Avid's future as a standalone company, potentially impacting employees and customers.

Next Steps

• Stockholders are urged to vote FOR the transaction before the special meeting on January 30, 2025.
• The company will seek required governmental and regulatory approvals for the proposed transaction.

Key Dates

Keywords

Avid Bioservices, GHO Capital Partners, Ampersand Capital Partners, acquisition, merger, stockholders, proxy vote, CDMO, biologics, premium