Avid Bioservices Recommends Stockholders Vote FOR Value Maximizing Transaction
The Special Meeting to vote on the transaction is scheduled for
The letter to stockholders highlights:
- How the transaction with GHO and Ampersand delivers significant, immediate and certain cash value to Avid stockholders;
- The robust process conducted by the Avid Board of Directors maximizes value for stockholders; and
- The transaction de-risks for stockholders Avid’s future as a standalone company.
The full text of the letter follows:
Dear Fellow Avid Bioservices Stockholders,
We are reaching out to let you know that you need to take action to realize the full value of your
We firmly believe the transaction is in the best interest of all Avid stockholders as it:
- Provides significant, immediate and certain cash value to Avid stockholders;
- Reflects a robust process conducted by the Board to ensure we are maximizing value; and
- De-risks for stockholders Avid’s future as a standalone company.
Our Board of Directors unanimously recommends stockholders to vote “FOR” the transaction today.
Delivering Significant, Immediate and Certain Cash Value to Avid Stockholders
The
Per share in cash |
Enterprise value |
13.8% Premium to Avid’s closing share price of |
| 63.8% premium to the Company's closing price of |
21.9% premium to the Company’s 20-day VWAP ending on the Unaffected Date |
24.4% premium to the Company’s 90-day VWAP ending on the Unaffected Date |
| 50.1% premium to the Company’s 6-month VWAP ending on the Unaffected Date |
207.1% premium to the Company’s 52-week low ending on the Unaffected Date |
6.5x multiple to management forecasted FY2025E revenue |
The Avid Board Conducted a Competitive Process to Maximize Value
By the Numbers
| The Avid Board of Directors is committed to maximizing the value for Avid stockholders. That is why the Board conducted a thoughtful, exhaustive and deliberate process that thoroughly tested buyer interest, with support from its legal and financial advisors, after receiving an initial unsolicited offer from GHO and Ampersand to acquire the Company for As detailed in our proxy, our Board and management team know our industry and the players in it well, having previously explored other potential strategic transactions and conducted diligence as part of those efforts. We did not proceed with those potential alternatives as our Board did not believe they created the most value for stockholders. When GHO and Ampersand made initial offers to acquire the Company, the Board reviewed them and rejected them as not sufficiently valuing the Company. The Board considered the Company’s standalone prospects, the risks and uncertainties of continuing to execute its standalone plans and the ability of Avid stockholders to adequately recognize the future value of Avid’s reasonable expectations for growth. The Board also conducted a process, which included outreach to at least 24 most likely strategic and financial buyers to gauge interest in a potential sale of the company. That process resulted in confidential discussions with seven parties and culminated with non-binding proposals from GHO and Ampersand and another party. After a period of back-and-forth communication with each party, the Board determined to proceed with GHO’s and Ampersand’s increased proposal. Ultimately, the process and negotiations with GHO and Ampersand resulted in five improvements to price and a 19% price improvement from the original unsolicited offer. The Board is confident that this robust process has led to the value maximizing outcome for stockholders. |
12 Board meetings since receipt of initial unsolicited offer to discuss the process |
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| 24 Most likely strategic and financial buyers engaged to explore interest in acquiring the Company |
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| 5 Improvements to the GHO and Ampersand offer resulting from the robust process and negotiations |
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| 19% Price improvement from the initial unsolicited offer |
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The Transaction De-Risks Avid’s Future as a
We are incredibly proud of the progress that we have made as a public company. That said, in evaluating the transaction, our Board considered factors that could impact our standalone financial and operating results going forward. These included, among others:
- Industry-wide Macroeconomic Headwinds: There are a range of challenges facing the biologics manufacturing industry, including uncertainty around the recovery in biotech funding, increased volatility resulting from escalating political and global trade tensions that could disrupt supply chains, and increasing competition.
- Additional Investments Needed: While Avid has made a number of strategic investments in the business over the last several years, more is needed to capitalize on the Company’s growth potential.
- Updated Go-Forward Growth Expectations as a
Public Company : As part of its review of potential strategic alternatives, the Board requested that Moelis prepare a financial analysis on Avid management’s probability-adjusted five-year plan for fiscal years 2025 through 2029. That review indicated that the Company’s growth prospects were below its own previous guidance as well as analysts’ consensus. Therefore, the Board determined that the transaction with GHO and Ampersand represented a value maximizing outcome for Avid stockholders, providing superior risk-adjusted value and certainty of execution. We encourage stockholders to read more about these financial projections and the financial analysis conducted by our financial advisor in our supplemental proxy filing materials.
We believe the transaction pays stockholders fair value for the investments Avid has made to date and eliminates for stockholders the execution risk of Avid continuing to operate on a standalone basis.
YOUR VOTE MATTERS: TAKE ACTION AND VOTE TODAY
We strongly encourage you to get your vote “FOR” the transaction today so, you can obtain significant, immediate and certain value for your Avid investment.
Regardless of how many shares you own, your vote matters. You can vote online, by phone or by signing and returning the proxy card that was mailed with the Company’s definitive proxy materials.
Thank you for your continued support.
Sincerely,
The Avid Bioservices Board of Directors
The Avid Board of Directors Unanimously Recommends that Avid Stockholders Vote “FOR” the proposed transaction with GHO and Ampersand. Vote TODAY online, by telephone or by signing and returning the enclosed proxy card. If you have questions or need assistance voting your shares, please contact: Elsewhere Call Collect: +1-212-929-5500 Or Email: proxy@MacKenziePartners.com |
Advisors
About Avid Bioservices, Inc.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
The Company has filed a proxy statement with the
PARTICIPANTS IN THE SOLICITATION
The Company and certain of its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding the Company’s directors and executive officers is available in the Company’s proxy statement for the 2024 annual meeting of stockholders, which was filed with the
FORWARD-LOOKING STATEMENTS
This communication contains “forward-looking statements” which include, but are not limited to, all statements that do not relate solely to historical or current facts, such as statements regarding the Company’s expectations, intentions or strategies regarding the future, or the completion or effects of the proposed sale of Avid to GHO and Ampersand. In some cases, these statements include words like: “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These forward-looking statements are subject to the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. The Company’s expectations and beliefs regarding these matters may not materialize. Actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of uncertainties, risks, and changes in circumstances, including but not limited to risks and uncertainties related to: the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed transaction that could delay the consummation of the proposed transaction or cause the parties to abandon the proposed transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement entered into in connection with the proposed transaction; the possibility that the Company’s stockholders may not approve the proposed transaction; the risk that the parties to the merger agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the Company’s common stock; the risk of any unexpected costs or expenses resulting from the proposed transaction; the risk of any litigation relating to the proposed transaction; and the risk that the proposed transaction and its announcement could have an adverse effect on the ability of the Company to retain and hire key personnel and to maintain relationships with customers, vendors, partners, employees, stockholders and other business relationships and on its operating results and business generally. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption “Risk Factors” and elsewhere in the Company’s most recent filings with the
The forward-looking statements included in this information statement are made only as of the date hereof. The Company assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
Contacts:
415-675-7401
sdiaz@vidasp.com
415-675-7402
tbrons@vidasp.com
1-800-322-2885
proxy@MacKenziePartners.com
(212) 355-4449
Source: Avid Bioservices, Inc