Avantor Stock Is Rising. An Activist Wants Changes, Maybe a Sale.

Avantor stock has plummeted this year due in part to reduced demand amid Trump administration cuts. (Dreamstime)

Avantor stock was rising sharply Monday on the news that activist investor Engine Capital had built a stake in the life-sciences company, and plans to push for strategic changes.

In a letter to the Avantor board made public on Monday, Engine Capital disclosed a stake of about 3% in the company, which sells scientific equipment. The investment firm argued that years of mismanagement have left Avantor lagging behind its peers.

“We believe the Board is responsible for Avantor’s underperformance and has, in our opinion, failed to adequately oversee the Company’s operations, management, capital allocation and succession planning,” wrote Engine Capital’s Arnaud Ajdler and Brad Favreau in the letter.

The pair called for stricter cost discipline, immediate share repurchases, and “a significant overhaul of the Board,” including a new non-executive chair, among other changes. They also requested a meeting with the board to discuss their perspective. If the company can’t implement a strategy to boost the stock price, it should eventually sell, Ajdler told Barron’s in an email.

Avantor didn’t immediately respond to a request for comment.

Shares of Avantor were climbing 11% to $12.80 in on Monday.

The stock had plummeted 45% this year as of Friday’s close, due in part to reduced demand from education and government customers amid the Trump administration’s funding cuts for scientific research.

Engine Capital believes Avantor’s strategic value would be about $17 to $19 per share today if it explored a sale, the letter said. The investment firm added that Avantor shares could reach $22, and $26 by the end of 2027 if management makes the recommended changes.

A well-known activist investor, Engine Capital began a campaign to get its representatives nominated to Lyft’s board earlier this year, but ended the effort in May after the ride-hailing company boosted its share buyback plan to $750 million from $500 million.

Write to Nate Wolf at nate.wolf@barrons.com