Grifols has purchased 90% of the shares of Biotest for 1,100 million euros. Along with the operation, the Catalan pharmaceutical company has launched a takeover bid for the rest of the shares to take over the entire German pharmaceutical company. In total, the operation is placed at 1,600 million euros, although the value that is calculated is 2,000 million when also considering debt.
This is one of the biggest business maneuvers of the Catalan company. With it, it will strengthen its main business area, blood products, and plans to increase its income in 2024 to 7,000 million euros, which implies 30% more than what was harvested in 2020 (5,340 million). Likewise, it estimates that within three years it will have an Ebitda of more than 2,000 million, a figure that would represent 51% more than what it obtained last year. On the other hand, the leverage ratio that the pharmaceutical company expects will be less than 3.5 in 2024.
Another of the important repercussions of the operation is the increase in plasma donation centers, one of Grifols’ priority objectives in its investment plans. After this acquisition, it will be made with 26 facilities in Europe, an area where an increase was needed since most of the business is in the United States. Before this operation (84% in the US) and by 2026 the goal of reaching 520 was proposed.
“This operation will expand our current portfolio of plasma treatments and accelerate the development of new products with the firm objective of adding value to patients, shareholders and other key stakeholders”, explains Raimon Grifols, Co-CEO of the company listed on the Ibex.
90% of the shares were held by Tiancheng International Investment, a Hong Kong-based company. When the operation is completed, something that is expected for the first half of 2022, Grifols will indirectly own 17,783,776 common shares of Biotest, representing 89.88% of the capital with voting rights and 44.94% of the total capital, and 214,581 preferred shares of the German pharmaceutical company, representing 0.54% of the total capital.
The Biotest operation occurs one month after the Grifols bondholders. The Catalan company then explained that it will serve to reduce the firm’s debt. At the beginning of the year, the company’s net financial debt stood at 6,200.5 million euros and the net financial debt to EBITDA ratio was 5.1x as a result of the acquisition of plasma centers from BPL and Kedrion and the Gigagen transaction.
Another of the consequences of the operation is that Grifols has decided to suspend the payment of dividends until the group’s debt is no less than four times the ebitda. On the stock market, the acquisition was not well received at the beginning of the session, when the company lost more than 2%. However, at mid-morning the value began to rise (just after a conversation between the company and investors) and in the early afternoon the share rose 2.6%.
For the operation, Grifols has had Osborne Clarke Spain, Germany and the United Kingdom and Proskauer Rose, LLP as legal advisors and Nomura Securities International, Inc. and UBS Europe SE as financial advisors.
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