Croda Strengthens Position in Life Sciences With Acquisition of Avanti Polar Lipids

Croda International Plc recently announced it has agreed to acquire Avanti Polar Lipids, Inc., a knowledge-intensive leader in lipid-based drug delivery technologies for next-generation pharmaceuticals. Croda has acquired Avanti for an initial consideration of $185 million on a debt and cash-free basis, with an additional earn-out of up to $75 million based on near-term commercial opportunities using Avanti’s lipid-based solutions.

Avanti, founded in 1967 by Dr. Walter and Rowena Shaw, is a technology-rich business that operates globally from one site in Alabama in the United States of America. Of its 150 employees, more than 100 are in scientific roles, and 29 have PhD qualifications. The know-how and expertise of its people drives the ongoing development of an extensive IP portfolio with the launch of 125 innovative products typically each year.

Avanti creates and makes high-purity polar lipids that are increasingly being used as delivery systems for complex therapeutic drugs and in next-generation mRNA vaccines. These lipid technologies ensure the targeted, controlled and extended release of active pharmaceutical ingredients (APIs), increasing their efficacy and safety. The business provides its world-class products and services to the majority of the leading pharmaceutical companies, as well as to thousands of biotechnology businesses and academic research organisations.

Avanti’s know-how and technology are highly complementary to Croda’s own capabilities in drug delivery systems, vaccine adjuvants and immunotherapy. The acquisition will more than double Croda’s research and development (R&D) capability in drug delivery. Avanti will also provide a new channel to market Croda’s ingredients for early-stage pharmaceutical research in both commercial and academic organisations worldwide. Equally, Avanti will be able to combine its leading position and flexibility in pharmaceutical R&D applications with Croda’s access to global markets, manufacturing expertise and capacity.

The acquisition is subject to customary US regulatory approvals. On completion, Avanti will continue to operate under its existing brand, led by the current management team. It will become a part of Croda’s Life Sciences sector and sit within the fast-growing Health Care business. The acquisition is being financed by a three-year term loan, maintaining Croda’s strong liquidity.

Steve Foots, Chief Executive Officer of Croda, said “We have long admired the Avanti team for their deep scientific know-how and are already working together on high-potential commercial opportunities. With their exciting drug delivery technologies, Avanti is a market leader in a high growth niche of the health care market, serving over 3,000 customers globally. Bringing Avanti’s best-in-class expertise into Croda also significantly enhances our presence across the pharma product lifecycle, including early stage R&D, clinical trials, analysis and formulation. I am confident that Avanti will prove transformative to the capabilities and performance of our Life Sciences sector.”

Walter Shaw, Chief Executive Officer of Avanti, added “Together with Croda, we are delighted to have found the right home for Avanti, which has been a lifetime’s work for my wife, myself and many of the team. This transaction comes at an exciting moment in the development and proven need for our proprietary lipid systems, and Croda’s skills and Avanti’s capabilities are a powerful match. I am convinced that Croda, with its focus on innovation, is the best place for Avanti to realise its global potential.”

Established in 1925, Croda is the name behind sustainable, high performance ingredients and technologies in some of the world’s most successful brands: creating, making and selling speciality chemicals that are relied on by industries and consumers everywhere.

Croda is a FTSE100 company with over 4,500 passionate and innovative employees, working across manufacturing sites and offices around the world with a shared Purpose to use Smart Science to Improve Lives.  As part of this Purpose, and with around two thirds of its organic raw materials already from bio-based sources, Croda has committed to be the most sustainable supplier of innovative ingredients, becoming Climate, Land and People Positive by 2030. For more information, visit www.croda.com.

Avanti specialises in the development and production of high-purity polar lipids that are increasingly being used in next-generation drug delivery technology and vaccines. It has two primary revenue streams:

-Research Products: sales of a wide range of high-purity lipid products for pharmaceutical research and development

-Pharmaceutical Services: comprehensive liposomal drug delivery development and production solutions. In addition to its formulation and analytical capabilities, Avanti provides a production capability, to the highest quality and regulatory standards (known as Good Manufacturing Practice or GMP), to support customers’ drug development, clinical trials and commercial supply of novel drug delivery systems

With its extensive portfolio, Avanti serves biotechnology and large pharmaceutical companies around the world.

BlackArch Partners served as the exclusive financial advisor to Avanti Polar Lipids, Inc.

 Lipids are fats, oils and waxes and are common in many biological systems including cell membranes. Polar lipids are molecules that have a lipid base and a positive or negative charge. This combination of lipid and charge allows polar lipids to form complex structures, such as liposomes and micelles, in water-based systems.

The high-purity lipids created and manufactured by Avanti are designed for high-end applications such as liposomal drug delivery vehicles, vaccine adjuvant systems and speciality excipients for targeted, controlled and extended release of actives. As such, they play an important role in the development of high value parenteral drugs for oncology and gene therapy products. For more information, visit www.avantilipids.com.