Grifols to acquire a Novartis diagnostics business unit for US$1,675 million
BARCELONA, Spain, Nov. 11, 2013
BARCELONA, Spain, Nov. 11, 2013 /PRNewswire/ --
oThe assets acquired include in vitro diagnostic products and technology
for transfusion medicine and immunology, a manufacturing plant in the USA
and commercial offices in United States, Switzerland and Hong Kong
oFollowing the acquisition, Grifols' Diagnostic Division will account for
over 20% of the company's sales, with an estimated turnover close to US$
oThis acquisition will significantly increase sales and EBITDA with
earnings accretion in year 1
oThis transaction will accelerate a growth strategy based on reinforcing
other business areas that complement its plasma derivative activity
oGrifols will strengthen its footprint worldwide providing integrated
solutions for blood and plasma donor centers from donation to transfusion
oThe transaction´s financing is fully underwritten, in the form of a US$1.5
billion bridge loan fully subscribed in equal parts by Nomura, BBVA and
Grifols (MCE: GRF, MCE: GRF.P and NASDAQ: GRFS), a global healthcare company
and leading producer of plasma therapies, and Novartis (VX: NOVN, NYSE: NVS),
today announced that they have signed a definitive agreement whereby Grifols
will acquire the transfusion diagnostics unit of Novartis for a total amount
of US$1,675 million (€1,240 million).
The transaction is part of Grifols' growth strategy of complementing its range
of plasma protein therapies with other diagnostic products and services
Grifols will expand its portfolio by including Novartis' diagnostic products
for transfusion medicine and immunology, including its highly innovative,
market-leading NAT technology (Nucleic Acid Amplification Techniques),
instrumentation and equipment for blood screening, specific software and
reagents. The assets acquired include patents, brands, licenses and royalties,
together with the production plant at Emeryville (California, United States)
and commercial offices in United States, Switzerland and Hong Kong (for the
Asia-Pacific region) among others.
This strategic operation will strengthen Grifols' Diagnostic Division,
particularly in United States with a very strong and specialized commercial
organization. It also diversifies Grifols' business by promoting an activity
area that complements the Bioscience Division (plasma proteins). Novartis'
diagnostic business, which focuses on guaranteeing the safety of blood
donations for transfusion or to be used in the plasma fractionating industry,
complements and extends Grifols' existing product range. Grifols will become a
vertically integrated company able to provide solutions for blood and plasma
donor centers, with the most complete product portfolio in the
immunohematology field: gel cards, multicard and the new genotyping technology
Grifols will also benefit from the creation of a more efficient platform to
market a wider range of diagnostic products and services in the United States
and other countries, and will also optimize its after-sales resources.
According to Victor Grifols, President and CEO of Grifols: "The acquisition of
Novartis' diagnostic business is a step further into our vision to become a
world leader also in the diagnostics field. To achieve this we knew we needed
a significant presence in United States. We initiated the process in the
Bioscience area in 2003 with the acquisition of the ATC assets and continued
with the Talecris transaction in 2011. During the last two years the
Diagnostic Division has been preparing for this step, especially in the
FINANCIAL DETAILS AND CLOSING CONDITIONS
Grifols will acquire Novartis' transfusion diagnostics unit for US$1,675
million (€1,240 million). The transaction will be structured through Grifols'
Diagnostic Division and a newly created 100% Grifols-owned subsidiary.
Grifols estimates pro-forma total annual revenues to approach US$1.0 billion
(€740 million) (including royalties) for its Diagnostic Division after the
closing of the operation.
As a result, the Diagnostic Division of Grifols would represent more than 20%
of the group's total income, compared to the current 4%, and the company would
accelerate its implementation of a new growth strategy based on promoting
complementary activity areas. As former Novartis employees are to be retained,
the transaction will also increase Grifols' workforce by approximately 550
The transaction´s financing is fully underwritten. A bridge loan for US$1.5
billion, has been fully subscribed in equal parts by Nomura, BBVA and Morgan
Stanley. The loan agreement does not include any financial restrictions with
respect to Grifols' dividends policy or investments. The acquisition has been
unanimously approved by the board of directors of both companies.
This acquisition will moderately increase leverage, which will be quickly
absorbed by resilient cash flow generation.
Grifols' net financial debt at the end of the third quarter of 2013 stood at
€2.4 billion, a successful deleverage track record from the Talecris
acquisition. This reflects strong results during the course of the year and
positive cash flows. As a result, the debt ratio fell to 2.6 times adjusted^1
EBITDA at the end of the third quarter.
The transaction, requiring customary regulatory approvals, is expected to
close in the first half of 2014.
NOVARTIS' DIAGNOSTIC AREA COMPLEMENTS AND EXPANDS GRIFOLS' BUSINESS
Grifols' Diagnostic Division manufactures and develops instrumentation and
reagents in three fields: transfusion medicine, immunology and hemostasis.
Grifols also produces and distributes blood collection bags. The company is
one of the leading suppliers of diagnostic tests for transfusion such as blood
typing tests or donor-patient pre-transfusion compatibility tests. Its
products are used by hospital blood banks, transfusion centers and clinical
Novartis Diagnostic business is focused on creating innovative solutions to
increase transfusion safety and improve medical outcomes, including preventive
screening and the prediction of health outcomes. Novartis Diagnostic products,
including instruments and assays, are based on the most innovative NAT methods
and used to test millions of blood donations around the world each year for
pathogens such as HIV (the AIDS virus,) hepatitis B and hepatitis C, and West
Nile Virus. More than 80 percent of the U.S. blood supply is tested on
Novartis Diagnostic systems to make sure they are safe for transfusion or use
in other blood products.
Grifols' legal advisors were Osborne Clarke S.L.P. and Proskauer Rose LLP.
Nomura acted as financial advisor to Grifols.
Grifols is a global healthcare company with a 70-year legacy of improving
people's health and well being through the development of life-saving plasma
medicines, hospital pharmacy products and diagnostic technology for clinical
As a leading producer of plasma medicines, Grifols has a presence in more than
100 countries and is the world leader in plasma collection, with 150 plasma
donation centers across the U.S. Grifols is committed to increasing patient
access to its life-saving plasma medicines through significant manufacturing
expansions and the development of new therapeutic applications of plasma
proteins. The company is headquartered in Barcelona, Spain and employs more
than 11,000 people worldwide.
In 2012, Grifols' sales exceeded €2,620 billion. The company's class A shares
are listed on the Spanish Stock Exchange, where they are part of the Ibex-35
(MCE: GRF). Its non-voting class B shares are listed on the Mercado Continuo
(MCE: GRF.P) and on the U.S. NASDAQ via ADRs (NASDAQ: GRFS). For more
information visit www.grifols.com
Novartis provides innovative healthcare solutions that address the evolving
needs of patients and societies. Headquartered in Basel, Switzerland, Novartis
offers a diversified portfolio to best meet these needs: innovative medicines,
eye care, cost-saving generic pharmaceuticals, preventive vaccines and
diagnostic tools, over-the-counter and animal health products. Novartis is the
only global company with leading positions in these areas. In 2012, the Group
achieved net sales of USD 56.7 billion, while R&D throughout the Group
amounted to approximately USD 9.3 billion (USD 9.1 billion excluding
impairment and amortization charges). Novartis Group companies employ
approximately 133,000 full-time-equivalent associates and operate in more than
140 countries around the world. For more information, please visit
This release contains "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. The words "anticipate," "believe,"
"estimate," "expect," "intend," "will," "should" and similar expressions, as
they relate to us, are intended to identify forward-looking statements. These
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and are subject to a number of factors that may cause actual results to differ
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global economy; the risk that the future business operations of Novartis will
not be successful; the risk that we will not realize all of the anticipated
benefits from our acquisition of Novartis; the risk that customer retention
and revenue expansion goals for the Novartis transaction will not be met and
that disruptions from the Novartis transaction will harm relationships with
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buy common stock, which is made only pursuant to a prospectus forming a part
of a registration statement, nor shall there be any sale of common stock in
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and may not be offered or sold in the United States absent registration or an
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constitute an offer or invitation to purchase or subscribe shares, in
accordance with the provisions of the Spanish Securities Market Law (Law
24/1988, of July 28, as amended and restated from time to time), Royal
Decree-Law 5/2005, of March 11, and/or Royal Decree 1310/2005, of November 4,
and its implementing regulations.
Contact: Grifols, Raquel Lumbreras Lanchas, +34 659 57 21 85; Borja Gomez
Vazquez, +34 650 40 22 25, Grifols' press office (Spain)
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