Back to top

Image: Bigstock

VWR Awaits Merger Closure, Stock Upside Potential Limited

Read MoreHide Full Article

On Aug 29, we issued an updated research report on Radnor, PA-based VWR Corporation which offers laboratory products, services and solutions. The company currently carries a Zacks Rank #2 (Buy).

We are eagerly waiting for the closing of VWR’s $6.4 billion acquisition by Avantor, a global supplier of ultra-high-purity materials for life sciences and advanced technology industries.

Post-closing (expected in the fourth quarter of 2017), the consolidated entity should create a major consumables-focused solutions and services provider to high-growth life sciences and advanced technologies industries. The buyout will build on Avantor’s strengths, including its cGMP (current good manufacturing practice) processes, a significant exposure to the emerging markets and VWR’s vital position across both Americas as well as Europe.

The combined company will therefore be serving a global customer base in all areas of activities from research through production, thus reflecting a unique advantage in a fast-growing marketplace.

From shareholders’ point of view, this potential merger with Avantor seems a beneficial move at the moment. The consolidation deal has been fixed at $33.25 per share in cash of VWR common stock, representing an enterprise value of approximately $6.4 billion. The purchase price represents an approximate 17% premium to the unaffected closing stock price as of May 2, 2017, the day before market speculations over a potential sale of VWR started.

VWR Corporation Price and Consensus

 

VWR Corporation Price and Consensus | VWR Corporation Quote

Notably, the stock price has already inched closer to Avantor’s offer price while investors wait for the merger’s closure. Hence, the short-term upside potential of VWR is limited now.

Other Key Picks

A few other top-ranked medical stocks are Edwards Lifesciences Corporation (EW - Free Report) , Lantheus Holdings, Inc. and IDEXX Laboratories, Inc. (IDXX - Free Report) . Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), while Lantheus Holdings and IDEXX Laboratories carry a Zacks Rank #2. You cansee the complete list of today’s Zacks #1 Rank stocks here.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has rallied roughly 19.04% over the last six months.

Lantheus Holdings has a long-term expected earnings growth rate of 12.5%. The stock has surged 26.1% over the last six months.

IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has gained around 2.3% over the last six months.

One Simple Trading Idea

Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.

This proven stock-picking system is grounded on a single big idea that can be fortune shaping and life changing. You can apply it to your portfolio starting today.

Learn more >>


Zacks' 7 Best Strong Buy Stocks (New Research Report)


Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.


Click Here, It's Really Free

Published in