Activist Engine Capital Builds 3% Avantor Stake, Presses Sale, Board Changes

Activist hedge fund Engine Capital has acquired roughly a 3% stake in life sciences company Avantor and is pushing for major strategic changes or a sale to unlock shareholder value. Engine Capital criticizes Avantor for years of operational missteps, poor execution, and missed financial targets since its 2019 IPO, which have led to stock prices near all-time lows despite the company's recurring revenue base. The investor values Avantor between $17 and $19 per share, significantly above the current market price around $11.50, and believes shares could reach as high as $26 by the end of 2027 if changes are implemented. Proposed measures include a board refresh, cost reductions, divestiture of non-core assets, and enhanced share repurchases. These efforts come amid Avantor's recent challenges, including weaker demand due to government research funding cuts and CEO turnover earlier this year. Engine Capital is expected to formally disclose its stake imminently and is advocating for either a sale or a comprehensive restructuring to improve performance and shareholder returns.