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(Reuters) - Avantor, owned by private equity firm New Mountain Capital, will buy VWR Corp (VWR.O) for about $4.38 billion, creating a laboratory equipment giant supplying everything from test tubes to microscopes to the healthcare and technology industries.
The deal combines Avantor's strength in manufacturing and its presence in emerging markets with VWR's distribution network in the Americas and Europe, the companies said.
Avantor's offer of $33.25 per share in cash represents a discount of 2.3 percent to VWR's Thursday close. VWR's shares fell as much as 2.9 percent to $33.07 in early trading on Friday.
The company's shares had risen 19.4 percent since May 2, the day before the Wall Street Journal first reported the companies were nearing a deal.
Avantor, formed in August 2010 when New Mountain Capital purchased the business from Covidien Inc, manufactures materials and chemicals for the biopharma industry.
VWR, a company that traces its roots to the California Gold Rush in the 1850s, was bought by Madison Dearborn Partners in 2007 and went public in October 2014.
For New Mountain Capital, the deal adds heft to its healthcare portfolio, which includes companies ranging from contact lens supplier ABB Optical to medical data firm Ciox Health.
"This may be a strategic acquisition for New Mountain, in line with a "deep dive" strategy where it aims to build a portfolio presence in a few niche sectors, including healthcare," William Blair's Amanda Murphy wrote in a client note on Thursday.
The companies said the deal reflects an enterprise value of about $6.4 billion.
Cowen and Co analysts said a higher price could have been justified but was likely weighed down by factors including the potential outcome of contract negotiations with Merck KGaA (MRCG.DE), one of VWR's largest suppliers.
The deal is expected to close in the third quarter. Some analysts said a competing bid was unlikely.
Avantor Chief executive Michael Stubblefield will lead the combined company, while New Mountain Capital will continue to be the lead shareholder, the companies said on Friday.
Goldman Sachs, Jefferies and Barclays are the financial advisers to Avantor, while Simpson Thacher & Bartlett LLP is the legal adviser.
BofA Merrill Lynch advised VWR, while Kirkland & Ellis LLP was the legal adviser.
Reporting by Ankit Ajmera and Divya Grover in Bengaluru; Editing by Saumyadeb Chakrabarty