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Avantor Expands Into China With RIM Bio Acquisition

Avantor Inc (AVTR) has acquired China-based single-use bioprocess bag manufacturer RIM Bio. Avantor provides mission-critical products and services to customers in the life sciences, advanced technologies, and applied materials industries.

The financial terms of the deal have been kept under wraps. Shares of the company were down 2.5% to close at $31.35 on June 1.

The addition of RIM Bio proprietary technologies will enhance Avantor’s bioprocessing manufacturing capabilities. Furthermore, the Chinese acquisition will result in Avantor’s first single-use production facility in the AMEA region.

Avantor’s Biopharma Production EVP Dr. Ger Brophy said, “Adding RIM Bio enables Avantor to better serve our customers by expanding our single-use manufacturing, distribution, and cleanroom capabilities to the AMEA region. RIM serves as an anchor for us to build our presence in this key region, as we better position Avantor to capture long-term opportunities in the growing, global Bioproduction space.” (See Avantor stock analysis on TipRanks)

On April 28, Avantor reported strong Q1 results. Total revenues of $1.79 billion surpassed the Street’s estimates of $1.7 billion and grew 17.5% from the year-ago period. Earnings of $0.35 per share also came in above the consensus estimate of $0.28 per share.

Following the Q1 earnings, Raymond James analyst Lawrence Keusch increased the stock’s price target to $37 (18% upside potential) from $34 and maintained a Buy rating.

Keusch said, “Although 2021 remains dynamic with various puts and takes, management remains confident in the stability and growth of the base business. Biopharma production remains a growth engine of the business, growing 30%+ in the 1Q. Moreover, the order book continues to strengthen and is providing management with greater visibility into the 2H of 2021.”

Consensus among analysts is a Strong Buy based on 9 Buys versus 1 Hold. The average analyst price target stands at $37.60 and implies upside potential of 19.9% to current levels. Shares have gained 65.1% over the past year.

Avantor scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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