Avista Healthcare Public Acquisition Corp. (NASDAQ: AHPA), a publicly traded special purpose acquisition company, and Envigo International Holdings, Inc., a leading early stage non-clinical contract research organization offering a diverse set of non-clinical discovery and safety assessment services as well as laboratory animal science tools, jointly announced that they have entered into a definitive merger agreement. Under the terms of the agreement, Envigo will become a wholly-owned subsidiary of AHPAC, which will be re-named Envigo International Holdings, Inc. and is expected to be listed on the NASDAQ stock exchange as of closing of the proposed transaction. The combined company will have an anticipated initial enterprise value of approximately $924 million, or 10.6x Envigo's estimated Calendar Year 2018 Pro Forma Adjusted EBITDA.
Dr. Adrian Hardy, the current President and CEO of Envigo, will continue in that role to lead the new company and will also serve on the board of directors. The board will also include at least two representatives of Avista Acquisition Corp., AHPAC's sponsor, as well as certain members of the current Envigo board.
Envigo, with over 80 years of experience, is a leading provider of non-clinical R&D services and research models offering mission-critical products and services to the life sciences, chemical, crop protection, and academic markets. The scientific support that the Company provides enables pharmaceutical companies, universities, governments, and other organizations to reduce costs, increase speed, and enhance productivity and effectiveness in drug discovery and development. Envigo is committed to helping customers realize the full potential of their products and research which contribute to enhancing the lives of people and animals as well as protecting the environment.
"We are delighted to be partnering with Envigo," said David Burgstahler, President and Chief Executive Officer of AHPAC. "The Company represents an ideal partner for AHPAC given its leading position in the global non-clinical contract research industry, attractive financial profile, and numerous avenues for growth. We believe the Company is well-positioned to benefit from the industry tailwinds driving growth in the non-clinical CRO sector. Additionally, under the leadership of the Company's experienced management team, Envigo has demonstrated the ability to execute on its acquisition growth strategy to broaden service capabilities and realize efficiencies."
"We are pleased to partner with Avista in this transaction to accelerate our growth by efficiently accessing capital in the public markets," said Dr. Hardy. "This transaction will further raise our profile with our biopharmaceutical clients and talent across the industry, while providing us with additional resources to increase our competitiveness in the attractive R&D products and services market."
Additional Transaction Terms and Conditions
This transaction will be funded through a combination of cash, stock, and rollover debt financing. Envigo's key existing shareholders will remain committed long-term partners by rolling over a significant portion of their equity. The existing equity owners will be entitled to future cash payments pursuant to a Tax Receivable Agreement relating to certain of Envigo's income tax attributes.
The proposed common stock ownership of Envigo includes the investors in AHPAC's initial public offering (48%), the existing equity owners of Envigo (46%), and AHPAC Founders (6%).
The boards of directors of AHPAC and the Company have unanimously approved the proposed transaction and a majority of the stockholders of the Company have consented to the proposed transaction. Completion of the proposed transaction, which is expected before the end of the year, is subject to customary and other closing conditions, including regulatory approvals and receipt of approvals from AHPAC's shareholders.
Credit Suisse Securities (USA) LLC is acting as financial advisor to AHPAC, and Jefferies LLC is acting as financial advisor to Envigo. Weil, Gotshal & Manges LLP is acting as legal advisor to AHPAC. Cahill Gordon & Reindel LLP is acting as legal advisor to Envigo. Ellenoff Grossman & Schole LLP is acting as special SPAC counsel to Envigo.
About Envigo
Envigo provides mission critical products and research services for pharmaceutical, crop protection, and chemical companies as well as universities, governments, and other research organizations. The Company is founded on the principle that research partnerships depend on unmatched expertise, unwavering dedication to customer service, and shared goals. Envigo is committed to helping customers realize the full potential of their products and research which contribute to enhancing the lives of people and animals as well as protecting the environment.
With over 3,300 employees worldwide, Envigo provides comprehensive scientific expertise and a full service offering in non-clinical research and development, research models and services, regulatory consulting, and analytical support to customers. Envigo's corporate headquarters are located in New Jersey. (www.envigo.com)
About Avista Healthcare Public Acquisition Corp.
AHPAC is a special purpose acquisition company that completed its initial public offering in October 2016. AHPAC was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or business combination with one or more businesses. AHPAC is sponsored by Avista Acquisition Corp., which was formed for the express purpose of acting as the sponsor for AHPAC. Avista Acquisition Corp. is an affiliate of Avista Capital Holdings, L.P ("Avista"). Headquartered in New York, Avista is a leading private equity firm with approximately $6 billion under management. Founded in 2005, Avista makes middle market control buyout investments in the healthcare sector. Through its team of seasoned investment professionals and industry experts, Avista seeks to partner with exceptional management teams to invest in and add value to well-positioned businesses. (www.avistacap.com)
