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Madison Dearborn to make 2.3x its money on VWR

Madison Dearborn Partners stands to make around 2.3x its money through the sale of VWR International, the lab-products distributor it first invested in nearly decade ago.

The buyer is New Mountain Capital portfolio company Avantor, which said May 5 that it agreed to pay $33.25 cash per share for the Radnor, Pennsylvania, target. The agreement represents an enterprise value of $6.4 billion.

Madison Dearborn acquired an about 83.3 percent stake in VWR in June 2007 alongside minority investor Avista Capital Partners. The investment came from its Fund V, which collected $6.5 billion.

A total equity investment of $1.425 billion was made at the time, an SEC filing shows, which implies Madison Dearborn injected an initial $1.186 billion in VWR.

In taking VWR public in June 2015, Madison Dearborn sold 18.4 million of its 102 million shares, a Form S-1 filing at the time showed. The firm made about $464.2 million in proceeds in connection with the IPO, as its stake narrowed to 63.6 percent from 77.6 percent.

The combined proceeds from three subsequent public offerings totaled about $778.14 million. By selling its remaining 34.8 percent stake to Avantor, representing about 44.55 million shares, the firm is set to reel in additional proceeds of about $1.486 billion.

Including a one-time $25 million dividend paid to Madison Dearborn in 2014, the firm stands to reap about 2.3x its investment after almost 10 years, according to Buyouts calculations.

Shares of VWR, listed on the Nasdaq, retreated about 2.3 percent to $33.28 on May 5.

Madison Dearborn, for its part, is running a dual process for Evo Payments International, Buyouts reported in late April. Deutsche Bank AG and JP Morgan Chase are advising the payment processor, sources previously said.

Madison Dearborn’s most recent flagship fund closed at $4.4 billion in August, topping its initial $3.75 billion target, Buyouts reported.

Goldman Sachs, Jefferies and Barclays provided financial advice to Avantor on the transaction, while Simpson Thacher & Bartlett offered counsel.

VWR turned to B of A Merrill Lynch for financial advice, while Kirkland & Ellis provided legal counsel.

Goldman Sachs, Barclays and Jefferies are providing committed financing to support the acquisition.

Representatives of Madison Dearborn declined comment.

Action Item: MDP’s current portfolio: www.mdcp.com/portfolio/

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