Engine Capital calls for governance changes at Avantor

Engine Capital LP, which holds approximately 3% of Avantor Inc. (NYSE: AVTR), sent a letter to the life sciences company's board of directors outlining opportunities to address what it views as a valuation gap and governance issues.

The activist investor contends that Avantor has experienced operating underperformance, ineffective cost controls and poor capital deployment decisions. Engine Capital stated these issues have caused the company to trade at a discount to its intrinsic value and life sciences peers.

Engine Capital is advocating for board refreshment with new directors who have experience in healthcare distribution, capital allocation and leadership at relevant companies. The firm also outlined its view that the company could realize significant share price appreciation by the end of 2027 through cost discipline, operational improvements, portfolio optimization and immediate share repurchases.

The letter details Engine Capital's assessment that the current board has failed to remedy what it characterizes as value destruction over multiple time periods. Engine Capital describes itself as a value-oriented special situations fund that invests in companies undergoing change.

The information was disclosed in a press release from Engine Capital.

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