Biotest Acquisition: Key Details, Impact, and What Comes Next

Grifols' acquisition of Biotest marks a significant development in the plasma-derived medicines industry. This strategic move is set to enhance Grifols' product portfolio and expand its global plasma collection network. By integrating Biotest's capabilities, Grifols aims to accelerate growth and innovation, ultimately improving patient access to essential therapies.

What Is Biotest?

Founded in 1946, Biotest AG specializes in hematology, clinical immunology, and intensive care medicine. Its core products include treatments for severe bacterial infections, coagulation disorders, and immune deficiencies, such as Pentaglobin, Haemoctin, and Intratect. Biotest differentiates itself through its innovation in immunosciences, commitment to sustainability, and extensive global network of plasma donation centers. The company also engages in strategic partnerships to enhance market access and product distribution.

Who Acquired Biotest?

Grifols is a leading global healthcare company specializing in plasma-derived medicines, diagnostics, and biopharmaceutical solutions. It plays a crucial role in improving global health through its innovative products and services, including treatments for chronic and rare diseases, diagnostic solutions for transfusion medicine, and tailored healthcare solutions for hospitals. Known for its ethical leadership and high-quality standards, Grifols operates in over 110 countries and is influential in scientific research and sustainability efforts.

When Was Biotest Acquired?

Grifols completed the acquisition of Biotest on April 25, 2022. This strategic move came after obtaining all necessary regulatory approvals and aligns with Grifols' plan to expand its global plasma capacity and diversify its product portfolio. The timing of the acquisition is significant as it follows a period of regulatory scrutiny in the industry, highlighting Grifols' commitment to strengthening its market position and enhancing patient access to plasma-derived therapies.

Why Was Biotest Acquired?

• Market Expansion: The acquisition of Biotest AG enables Grifols to significantly expand its market presence. By integrating Biotest's 26 European plasma centers, Grifols now owns the largest private European network of plasma centers, enhancing its capacity to collect plasma and increasing the availability of plasma therapies globally. This strategic move strengthens Grifols' operations and revenues in Europe, the Middle East, and Africa.
• Technology Integration: Grifols benefits from Biotest's advanced technologies and ongoing clinical trials. The acquisition allows Grifols to complement its innovation efforts with high value-added projects, such as the development of new plasma-derived products like IgM immunoglobulins and fibrinogen. This integration is expected to improve plasma economics and accelerate the development of R&D projects, ultimately increasing revenues and profit margins starting in 2024.
• Competitive Advantage: The acquisition strengthens Grifols' position as a leading company in the plasma-derived medicines industry. By leveraging Biotest's operational, industrial, and scientific capabilities, Grifols can improve profitability and revenue per liter of plasma. The combined potential of Grifols and Biotest is expected to further consolidate the global plasma industry, providing a significant financial edge over competitors and enhancing patients' quality of life.

Acquisition Terms

• Acquisition Price: The transaction values Biotest's capital at approximately EUR 1,600 million (Equity Value) and its market value at EUR 2,000 million (Enterprise Value). Grifols agreed to acquire the entire share capital of Tiancheng (Germany) Pharmaceutical Holdings AG for EUR 1,091 million.
• Payment Method: The acquisition involves a cash payment of EUR 773 million and a loan of EUR 313 million. Grifols also paid EUR 362 million for 1,250,298 ordinary shares at EUR 43.00 per share and 8,340,577 preferred shares at EUR 37.00 per share.
• Key Conditions or Agreements:
  • The acquisition required and obtained regulatory approvals from the Turkish competition authority (Rekabet Kurumu), the German financial supervisory authority (BaFin), and the Comisión Nacional de los Mercados y la Competencia (CNMC) in Spain.
  • The Management Board and Supervisory Board of Biotest recommended accepting Grifols' takeover bid.
  • The transaction includes a loan receivable granted by Tiancheng (Germany) Pharmaceutical Holdings to Biotest AG for an amount of EUR 318 million.
  • Grifols now controls 96.20% of the voting rights and holds 69.72% of the share capital of Biotest AG.

Impact on Biotest

The acquisition of Biotest by Grifols has led to significant changes in operations and management. Grifols now controls 96.20% of Biotest's voting rights and holds 69.72% of its share capital. This shift has resulted in the integration of Biotest's 26 European plasma centers into Grifols' network, making it the largest private European network of plasma centers. Additionally, Grifols' leadership is expected to drive strategic initiatives, leveraging Biotest's advanced technologies and ongoing clinical trials to enhance their product portfolio and operational efficiency.

In terms of product offerings and services, the acquisition is poised to expand the availability of plasma therapies, including new products like IgM immunoglobulins and fibrinogen. This expansion is anticipated to boost revenues and profit margins starting in 2024. While specific employee and customer reactions have not been detailed, the strategic benefits suggest a positive outlook for both groups. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly, ensuring a smooth and efficient transition.