Avantor Inc

Item 2.05 Costs Associated with Exit or Disposal Activities

As previously announced, effective January 1, 2024, the Company transitioned to a new operating model consisting of two complementary business segments, the Laboratory Solutions segment and the Bioscience Production segment. In conjunction with the new operating model, the Company launched a multi-year cost transformation initiative and undertook a period of evaluation to determine the scope and scale of the initiative which included certain immaterial restructuring charges in the first and second quarters of 2024. On July 24, 2024, the Company committed to certain significant restructuring activities in connection with the initiative. These activities are designed to right-size the Company’s cost base and optimize its footprint and organizational structure with a focus on driving significant cost improvement and productivity. The Company will involve local stakeholders, including relevant employee representatives, in each impacted country in compliance with local laws and regulations.

The Company's objective for this multi-year cost transformation initiative is to deliver approximately $300.0 million in annual gross run-rate savings by the end of 2026.

While the Company is continuing to define the specific actions that may be required to deliver the targeted benefits, it expects to incur incremental restructuring charges in the range of $50.0 million to $65.0 million, including severance costs and other employment related expenses in the range of $40.0 million to $50.0 million. The Company expects to recognize the majority of these severance and related costs during the third and fourth quarters of 2024. Other charges, primarily related to impairments of long-lived assets and site closures, are expected to be immaterial in 2024. Cash expenses are expected in the range of $40.0 million to $50.0 million.

The Company is currently in the process of defining the specific parameters of its restructuring activities associated with the multi-year cost transformation initiative and, accordingly, future actions by the Company or changes in circumstances from current assumptions may cause actual results and future cash payments to differ.

Securities Trading Plans of Directors and Officers

Our directors and officers (as defined in Exchange Act Rule 16a-1(f)) may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5–1(c) of the Exchange Act. No directors or officers, as defined in Exchange Act Rule 16a-1(f), of the Company adopted orterminated (i) a Rule 10b5-1 trading arrangement, as defined in Item 408(a) under Regulation S-K of the Securities Act of 1933, or (ii) a non-Rule 10b5-1 trading arrangement, as defined in Item 408(c) under Regulation S-K of the Securities Act of 1933, during the three months ended June 30, 2024.