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Why Maravai LifeSciences Tumbled Nearly 12% Today

By Eric Volkman – Sep 10, 2021 at 6:34PM

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A private equity firm and several peers are cashing out of a pile of shares.

What happened

Maravai LifeSciences Holdings (MRVI -1.39%) stock wasn't exactly the picture of health on Friday. It fell by nearly 12%, on news that a group of selling stockholders had priced a big secondary share sale.

So what

Maravai announced that those investors are collectively unloading an even 20 million shares of the company's Class A stock for $50 apiece. These sellers are led by lead investor GTCR, a private equity firm that currently holds 21.5% of that stock and controls 65% of the company's voting power. After the sale, GTCR will retain a holding of 56.3% to 57.4% of the latter.

Stethoscope atop $100 bills and pennies.

Image source: Getty Images.

In addition, GTCR and its partner sellers have granted the deal's underwriters a 30-day option to collectively buy an additional 3 million shares. Maravai said the issue should be completed next Tuesday, Sept. 14.

That $50-per-share level is $3.35 below Thursday's closing price of the biotech stock. Investors indicated their displeasure with the sale by driving the price down to barely over $47 on Friday. According to Yahoo! Finance, the company currently has just over 114 million shares outstanding.

Maravai stressed in its announcement that since it is not the selling entity, it will receive no proceeds from the issue.

Now what

It's a good time for early Maravai investors to sell their shares. That $50-per-share level is nearly double the $27 Maravai fetched in its November 2020 IPO. Although the stock is down some from the $60-plus peak it reached this summer, a nearly 100% gain is certainly nothing to sneeze at.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Maravai LifeSciences Holdings, Inc. Stock Quote
Maravai LifeSciences Holdings, Inc.
MRVI
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