Friday, December 3

Grifols continues its stock market penance after betting on Biotest

Grifols continues with its recurring stock market decline during 2021, and has reached the price of its share at 18,035 euros at 1:00 p.m., before recovering slightly to stabilize around 18.19 euros.

The decline in biotechnology moves around 2.17 percent during Thursday’s session, and already exceeds 24.5 percent so far this year.

The price close to 18 euros, in fact, has brought Grifols closer to records that the Catalan company had not seen for more than five years, when it fell to 17.44 euros in November 2016.

Grifols’ new crash confirms the downward trend of a market that has once again penalized the company after an announcement related to Biotest.

An ad that turns against the company

The company’s shares have lost ground on the stock market on the same day as Grifols has communicated to its investors the execution of your strategic plan and your progress in investing in Biotest, as well as its agreement with the Singaporean sovereign wealth fund, GIC.

On the one hand, Grifols has confirmed that both the board of directors and the supervisory board of Biotest They have supported Grifols’ investment in their company, recommending that minority shareholders accept the takeover bid presented by the Spanish company.

Biotest’s board and council state in the announcement to its investors that “the offer is fair for Biotest shareholders” and that its implementation “benefits the company and shareholders.”

Grifols also explains that “after an exhaustive analysis, both bodies have reached the conclusion that the business combination of Grifols and Biotest constitutes a unique opportunity to increase the availability of plasma therapies, as well as to promote the development of new products and projects. R&D “.

Debt relief

At the closing of the latest accounts presented by Grifols, those of the first half of 2021, the debt amounted to 6,476 million euros, with a debt / ebitda ratio of 4.9 times.

The acquisition of Biotest for 1,100 million euros will cause the ratio to grow to 5.4 times due to the issuance of debt by Grifols through bonds worth 2,000 million euros to finance the operation.

The group has assured to continue working with the objective of placing its debt ratio below 4x in 2023, and below 3.5x in 2024.

To achieve this objective, the company relies on the injection of GIP, the sovereign wealth fund of Singapore, thanks to which Grifols has affirmed that it will be able to reduce its indebtedness by 841 million euros.

This amount of money will come to Grifols in exchange for a percentage of its participation in Biomat USA, the US subsidiary of the Spanish multinational from which GIC will become a strategic investor for Grifols.

Debt encourages growth plans

Despite the sharp drop in its shares, Grifols has shown confidence in its future prospects, stating that “the demand for products and solutions from all Grifols divisions remains very solid, in an environment in which the price increase stands out. of the main plasma proteins in the main regions where the company operates. “

The company expects these price increases to be maintained in 2022, and has gained muscle with the planned opening of 20 plasma centers in Egypt for the period 2022 and 2023, which will join the 355 centers distributed throughout the world.

Until September 2021, the company highlights in its statement, Grifols “has advanced in the execution of its expansion plan to increase the supply of plasma through the acquisition of 32 plasma centers and supply agreements.

As of December 31, 2021, the biotechnology company expects the network of plasma centers in the United States and Europe to increase to 370 total centers.

Bondholders remain impassive

Grifols continues your expansion plan turning a deaf ear to the market, largely covered by the last bond issue of 2,000 million euros of debt that it carried out on October 5.

Unlike shareholders, bondholders, who in August they endorsed the company’s strategic agreement with GIC with 90% consent to the internal reorganization necessary to accommodate the fund, they do seem to be betting on the progress of the company.

All the bonds issued by the Catalan company, despite having credit ratings that range between B- and BB-, are trading sideways at par.

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