Good morning. My name is Celine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Avantor to Acquire Masterflex Bioprocessing Conference Call. At this time, all participants are in listen-only mode. After the speakers' remarks, there will be a question-and-answer session. To ask a question during the call, please press star one on your telephone keypad. To withdraw your question, press the pound key. Please be advised that there's a limit for one question only. I will now turn the call over to Mr. Michael Stubblefield, President and Chief Executive Officer. Mr. Stubblefield, you may begin your conference. Thank you, good morning, everyone. I'm excited to be here today to discuss our acquisition of Masterflex. Thomas Szlosek, our CFO, is joining me on the call today. Following our prepared remarks, we will be happy to take your questions. Starting on slide two, I need to remind you that we will be making some forward-looking statements which reflect our current views and are not guarantees of future performance. This call will also include a discussion of non-GAAP measures. A reconciliation of non-GAAP measures can be found in the appendix of the presentation. You are encouraged to read the rest of our standard disclaimers as shown here. I am now on slide three. This morning, we announced the acquisition of Masterflex, a leading global manufacturer of peristaltic pumps and aseptic single-use fluid transfer technologies, for $2.9 billion or $2.7 billion net of anticipated tax benefits. This acquisition is an exciting opportunity to further strengthen our single-use offering for the high-growth biopharma end market. Masterflex is a business segment of Antylia Scientific, a privately held portfolio company of investment firms GTCR and Golden Gate Capital. For over 50 years, Masterflex has been providing industry-leading fluid transfer technologies that play a central role in critical biopharma research and production workflows. Masterflex's technologies are relevant across all established and emerging biopharma platforms, including monoclonal antibodies, cell and gene therapy, and mRNA, and support both vaccine and therapy manufacturing, including COVID-19. Over 80% of Masterflex's revenue is concentrated in biopharma, giving us access to a $5 billion addressable market that is growing high double digits. Masterflex gives us a fully integrated solution for managing aseptic fluid transfer throughout the bioproduction workflow. Its offerings span three product categories. First, Masterflex manufactures peristaltic pumps and instruments that transfer critical materials at precise flow rates without coming into direct contact with sensitive materials. Masterflex continues to invest in product enhancements, including multimodality, wireless access, and stainless steel componentry. Masterflex has a significant install base of pumps in academia and biopharma research, as well as in biopharma manufacturing. They also manufacture engineered single-use tubing, which is designed and optimized to work with Masterflex pumps to achieve precise performance attributes. This tubing is specified into customers' processes and drives highly recurring revenues. The final product category is single-use components for fluid transfer assemblies to complete the end-to-end solution. As you know, the single-use fluid transfer space has been an area of significant growth for Avantor, supported by expansions of our facilities and our previously announced acquisition of RIM Bio. Our single-use platform has delivered double-digit growth in 2021, and we see this acquisition as a further accelerator of this growth. Moving on to slide four. There are several elements of Masterflex's strategic positioning that attracted us to this opportunity. Masterflex's industry-leading pumps act as an anchor technology for the bioproduction workflow. As customers design their production processes, they decide on pumping technology early in the process. This will enhance Avantor's advanced insight into customers' production needs, enabling us to position the right pumps and associated fluid transfer solutions and to position other Avantor products and services. Additionally, fluid transfer solutions are mission-critical to the execution of bioproduction workflows. Masterflex's products enable biopharma customers to transfer materials throughout the upstream, downstream, and fill and finish workflows at very precise flow rates in an aseptic environment. Masterflex pumps and tubing are engineered to work together to ensure precise performance attributes. The entire solution is specified into customers' processes, driving a significant pull-through of recurring consumable sales, including tubing and other single-use components. Masterflex's fluid transfer solutions complement Avantor's existing single-use platform, where we design and configure custom single-use assemblies. Our assembly capabilities will enhance Masterflex's current offering and enable us to deliver a fully integrated fluid transfer solution with proprietary Masterflex components. Turning to slide five. I'd like to highlight the close strategic alignment between our businesses. Masterflex shares several core business attributes with Avantor, including its premium brand position, stringent quality standards, strong culture of innovation, and specification-driven models. The early access I just described, as well as the complementary capabilities of Masterflex and our single-use platform, will drive significant cross-selling opportunities. The business also strengthens Avantor's offering across all bioproduction platforms, further enhancing our relevance in this high-growth end market. Additionally, Masterflex's considerable installed pump base in both research and production drives significant demand for single-use consumables and components, consistent with Avantor's highly recurring revenue profile. Finally, Avantor will leverage its differentiated channel and deep biopharma customer relationships to enhance growth opportunities in both research and production environments. With that, let me turn it over to Tom. Thank you, Michael. Good morning, everyone. Slide six outlines Masterflex's financial profile and key parameters of the transaction. Starting with some of the financial highlights. In 2022, Masterflex is expected to generate approximately $300 million in revenue and is expected to grow at rates similar to that of our biopharma production business, which, as you know, has consistently been above 15%. Approximately 90% of Masterflex's content is proprietary, with margins comparable to those of Avantor's proprietary products. Similar to Avantor, the Masterflex business has a strong customer reorder profile. Approximately 70% of its business is recurring. The carve-out acquisition will be an all-cash transaction for $2.9 billion, subject to final adjustments at closing. As Michael mentioned, there are approximately $150 million of income tax benefits, mostly created by the transaction, that reduce the net purchase price to $2.7 billion. We expect the transaction to be accretive to adjusted EPS in year one and deliver a high single-digit return on invested capital by year five. In terms of financing, we've fully secured 100% debt financing for the transaction. Through the expected close in the fourth quarter, we'll have the flexibility to consider an equity-based component to fund the transaction. Masterflex has a similarly strong cash-generating profile to Avantor, and we fully expect our leverage to be within our targeted two times to four times adjusted EBITDA by the end of 2022. Let me move to slide seven. This transaction hits the bullseye on both our qualitative and quantitative acquisition criteria. It's a proprietary technology serving highly attractive growth spaces and generates high margin and recurring revenue. Its double-digit growth rate and proprietary gross margins will be accretive to the Avantor enterprise. We also expect modest accretion to our 2022 adjusted earnings per share and a high single-digit return in year five post-acquisition, and we remain committed to a strong balance sheet, including the targeted two to four times leverage range by the end of 2022. This concludes our prepared remarks. At this point, Michael and I will be happy to take your questions. Thank you. At this time I would like to remind everyone to ask a question, please press star one on your telephone keypad, to withdraw your question press the pound key. Again there's a limit for one question only, please stand by while we compile the Q&A option. Your first question comes from Tycho Peterson from J.P. Morgan. Your line's open. Hey, thanks. Wondering if you could talk a little bit more about revenue mix. How much is monoclonal antibodies versus cell and gene versus mRNA, and what's the COVID exposure? How are you thinking about revenue synergies on this one going forward? To what degree were they already being kind of specced in to your workflows? If I could ask a follow-up for Tom. I've had a few questions about the equity comments in the press release. I know you said you have 100% debt financing, can you just talk about your views on a potential equity offering and how soon you might do that? Thanks, Tycho. One of the things we're excited about in regards to the transaction is the additional exposure it gives us to the biopharma space. Similar to our existing technologies, the Masterflex lineup of products is relevant across all of the modalities, including those that you mentioned. The mix of the business looks very similar to our own, which is to say that the majority of the revenue is coming from monoclonal antibodies. But they're also very exposed to the recent approvals in cell and gene therapy, certainly, there is COVID exposure here, particularly through the mRNA modality, that I would probably characterize in and around 10%-15% of the current year revenue. From a synergy standpoint, clearly, this is a commercially driven deal. There's limited cost synergies that we would be going after here. As I reflected in my remarks, there are considerable cross-selling opportunities. We'll certainly be able to leverage our channel, particularly in the academia environment, to accelerate growth in the research environment. Obviously, we'll be able to leverage our deep biopharma access and relationships around the world. It is a specification-driven profile of the revenue, as we mentioned. There'll be a bit of a lag here as we start to see these new opportunities with our commercial teams. We would certainly anticipate delivering on revenue synergies as we move forward. For the sake of clarity, the financials that Tom walked you through there on slide six in the deck exclude any potential synergies that we would get from the transaction. Yeah, Michael, on the financing comment, first of all, we've secured 100% committed financing. We've talked about our lending partners there. Fully expect to have a constructive debt financing that's consistent cost-wise and tenor-wise with our existing portfolio. With that said, there's no requirement for us to do equity in this transaction. We've had some preliminary discussions with ratings agencies. We'll have some more, but I think from that perspective, there's been support for what we've articulated. We do have a desire to preserve flexibility going forward to be able to have capital to put to work as opportunities arise. We've also always been committed to 2x-4x leverage. It's important for us that we have a clear pathway to get to that in a pretty reasonable period of time. As we said, with the equity component, this deal will be just slightly above 4x and quickly de-lever over the course of 2022. In terms of timing, there's really no hurry. We've got a lot going on this week between this event. We've got our investor day on Thursday. We'll be monitoring the market over the next short-term period of time and decide what, if anything we decide to do and when we do it in due course based on the markets. Thank you. Thank you. Your next question comes from Derik de Bruin from Bank of America. Your line's open. Hi, good morning. Thanks for taking my questions. Just a couple of ones. What's your overall proprietary product mix today following the deal and Ritter GmbH? I realize you're going to probably go through some of this on the margins at the Analyst Day coming up, but what do you sort of think about as the longer-term margin profile of the company now that you sort of have been switching the mix? Yeah, Derik, thanks for the reference to our Investor Day on Thursday. Hope everybody is able to join us there, where we will be spending some more time talking about our views on margins and proprietary content going forward. The two acquisitions that you mentioned, Ritter that is closed and this Masterflex deal once we get it closed, similar top-line profile, roughly $300 million each. Also both have similarly high proprietary content will undoubtedly help move things forward here today. With the businesses that we had prior to closing those two acquisitions, we were about 50% of our revenue, as we've talked about it before, as proprietary. You can kind of add in these two acquisitions on top of that will certainly start to move things forward in a more meaningful way. On top of just the natural enhancements we're getting to the profile through organic growth that we have. We'll be prepared to kind of give you some more insights on this when we speak on Thursday, Derik. Thank you. Your next question comes from Vijay Kumar with Evercore ISI. Your line's open. Hey, guys. Congratulations on the transaction. Michael, maybe one on the deal financing side, maybe from a slightly different perspective. I think the deal close of late Q4, I mean, that seems fairly quick. One, are there any regulatory concerns here the closing applies now? Given the deal close timing or uncertainty around regulatory process, how should we think about the equity offering? I think by my math, it seems like a billion-plus is on the offering here. Vijay, one of the, I think, attractive elements of us as a buyer certainly is our ability and certainty to close transactions quickly. We're relatively unencumbered from a regulatory perspective. That certainly was one of the differentiating factors in us securing this deal today. We do not anticipate significant or material regulatory concerns here. We will obviously, I think it'd be wise to file here in the U.S., and there may be one other minor foreign jurisdiction that we would need to file in for antitrust approval. As you note, we are anticipating a relatively short timeline to getting the deal closed just based on the timelines associated with regulatory reviews in those jurisdictions and our conviction that there shouldn't be any meaningful concerns on that front. Relevant to the financing structure, I think the key message I'd like you just to take away from the call today is just a couple of things. One, we're committed to maintaining our leverage within the 2x-4 x range. Clearly, if we were to do this with all debt, it would take us between 4.5-4.7, somewhere in that range at the time of the close. If we left it there, we do have the advantage that the business does delever rather quickly. In the worst case, you would certainly exit 2022 below 4x levered. We would like to continue to preserve flexibility. As we've shown with our M&A activities this year, we've been able to significantly enhance our capabilities, our offering for our customers, and bring forward a pretty compelling enhancement to our financials. Given that, we'll certainly take a look and monitor the markets here in the coming weeks and ultimately make a decision on whether we go with a full debt offering here or whether we supplement it with equity. Maybe just one quick follow-up, if I may. Was this a comparative process? Yes. I think as it was disclosed in the press release, the sellers were being advised by J.P. Morgan. It certainly was launched as a competitive process a number of months back. It was argued that it was competitive throughout, even up until recent days here. Short answer would be yes, it was a competitive process. Secondly, I think we've been able to, as we talked about before, just differentiate ourselves as a buyer and not simply just based on economics. In this case, I think the other non-economic factors actually had us positioned pretty strongly here, including the lack of regulatory concerns, our ability to close quickly, and just the strength of our single-use bioproduction offering makes this a natural home for these assets. We would now have the only end-to-end fully integrated fluid management solution for the bioproduction space. I know that the sellers are excited and anxious to become part of our platform. Congratulations on getting a winning bid, Michael and Tom. This seems like a home run for you guys. Thank you. Thanks, Vijay. Your next question comes from Jack Meehan for Nephron Research. Your line's open. Thank you. Good morning. Good day. Morning. Wanted to ask about bandwidth on M&A. You're now managing two big integrations at once. What's the appetite to do more? How does that factor into your thinking of leveraging an equity component when it comes to the financing? Jack, that's a good observation. I think we talked when we closed the Ritter acquisition around this topic of around just bandwidth, particularly given what's going on from an M&A standpoint, as well as just managing a pretty frothy growth environment of the core business. One of the things that we considered in this particular transaction is that the internal resources that are focused on driving the Ritter acquisition are pretty distinct and separate from the resources that we're going to be relying on to drive this particular acquisition. In both cases, we're aided by the fact that there are limited cost synergies that we're trying to drive here, which can add another element of complexity in an integration. They're in primarily different end markets, primarily different resources that we're able to carve out here to drive the integrations, which certainly gives us confidence that we're well positioned. We've got a well-established playbook for this in terms of how we stand up our integration office, the cadence, the engagement of our executive management team. We've done dozens of these deals in recent years, and I think we're obviously very comfortable that we've got the bandwidth to do this. In terms of going forward, we've said all along that M&A will be an important element of our growth story and certainly will be important for us to accelerate the top-line growth of our company as well as to bring additional proprietary content into the business, which will expand our margins. We would expect to continue to do that. Clearly, with the size of this acquisition and just where we sit, wouldn't anticipate doing any more, certainly in 2021. Depending on what capital structure we ultimately land on and how much flexibility we give ourselves, we would hope to be continuing to work our pipeline and look for opportunities in 2022. Great. Thanks, Michael. Your next question comes from Patrick Donnelly from Citi. Your line is open. Great. Thanks for taking the question, guys. Michael, maybe one for you just on the revenue synergies to follow up on one of the earlier questions. How much did that play into this? When you think about the customer overlap, whether it's leveraging your reach and bringing their products into some of the relationships you have that maybe they didn't have access to, and then vice versa, can you just talk about maybe the overlap between you two and then again, the opportunity to leverage each reach and drive more penetration for the products here? It's a really insightful question, actually. When we looked at the business, I think our first observation was that it's a great business on a standalone basis. They've got a great track record, and on their own, they have been growing very impressively through their investments in innovation, bringing their technology capabilities along. They've had a long-standing leadership position in the research space, in the lab space that they're offering, and have done a really nice job of pivoting here over the last few years into the production environment. There certainly is a strong overlap. We did observe, though, as we got into the diligence, that our presence is, just given our differences in scale, is going to be a bit more pervasive. We see certainly an opportunity to leverage our access and our positioning to drive accelerated growth of the Masterflex business. We also see the opportunity to leverage our channel, as I referenced in my prepared remarks, particularly in academia, where there's a strong use of these types of products. The other thing that is going to be critical here is, given the early access that this gives us to production, as I mentioned, fluid transfer becomes one of the primary designing concerns or focus areas for our customers' engineering teams and process development teams. It will just further enhance our visibility into the production needs of this customer base, which will give us an opportunity then to not only seed our pretty comprehensive single-use offering, but it's obviously going to give us an early seat at the table to position our other process ingredients, excipients, chromatography resins, and the rest of our portfolio. That's an important element of this. We like the business on a standalone basis w ith the synergies that we see coming from this, we like it even more. Great. Thank you. Your next question comes from Luke Sergott from Barclays. Your line is open. Hey, guys. Thanks again. Can you just give us a sense of the geographic mix according to how you're going to be reporting, see where the accretion's going to come from on your different segments? I have a follow-up for the normalized growth rate. Regional wise, the mix is not much different from what we have for Avantor. I think they're a little bit bigger in mass. I think the growth perspective, there really isn't anything that distinguishes any of their regions from a differential in growth at this point. All right, great. On the normalized growth rate, you gave high double digits for long term. Can you give us a sense of how the business performed during the last couple of years of the COVID tailwinds and really trying to get at the rise of single use and where this puts your business from that perspective as a single use versus a large installed base portfolio mix? Yeah. Thanks, Luke. As Michael was explaining, the model certainly is to get the anchor pump technology into an installed base, whether that's in a lab or in a production environment. Masterflex has been very successful with that, and that has served to enable them to spec in a lot of the other componentry, especially the tubing, and create a nice business that has a strong flow of consumables and aftermarket type products. When you look at it from a COVID perspective, just like most other companies in our space, there's been tailwinds. We've been pretty thoughtful about how to assess those, and certainly have done that as we've built our plan going forward. We've said that this is going to be a double-digit grower, and if you read the fine print, it actually says high double digits means greater than 15%, and we're confident in that. Historically, the growth has been much higher. We think we've been conservative on that, and we think we've also given the proper assessment on some of the potentially non-recurring type tailwinds they may have going forward. Great, thanks. Okay. We have one last question from Josh Waldman from Cleveland Research. Your line's open. Good morning. Thanks for taking my question. Wondering if you could comment on how much of the $300 million in expected 2022 revenue is currently going through the VWR channel? A follow-up on Derik's question, wondered how much of the, I guess, with the Masterflex business, how much of the proprietary business is self-manufactured? Thank you. Well, with your first point there about the split on the $300 versus how much of that will be incremental to our existing book of business, I think for modeling purposes, you could consider almost all of it to be incremental. There's probably low single-digit millions that we're running through our channel today. We'll certainly be able to accelerate that in our hands. Your second point about the split on the proprietary content, I think on the slide six there, we show that more than 90% of this should be considered as proprietary. There's some third-party componentry that becomes part of some of the assembly solutions that in some cases, we're carrying forward our partner's brand on that. More than 90% of our revenue here should be considered as proprietary branded offerings. The margins associated with that would be in line with the margins of the rest of our proprietary portfolio across our business. Thank you. I would now like to turn the call over to Mr. Michael Stubblefield for the closing remarks. Thank you. Thank you all for joining us today, especially coming out of a holiday weekend on short notice. Acquiring this Masterflex business is another example of our M&A strategy in action and a great opportunity to create value for our customers as well as for our shareholders. As we referenced in a few points in our remarks today, we do look forward to engaging with you at our upcoming Investor Day this Thursday, September 9th, at 9:00A.M. Eastern Daylight Time. Until then, thanks for joining us today and have a great day, everyone. This concludes today's conference call. Thank you all for joining. You may disconnect.