Grifols is expanding its portfolio by acquiring Novartis' diagnostic products for transfusion medicine and immunology in a deal worth USD1.675bn.
The deal, which will be structured through Grifols' diagnostic division and a newly created 100 per cent Grifols-owned subsidiary, includes Novartis’ 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, US) and commercial offices in US, Switzerland and Hong Kong (for the Asia-Pacific region) among others.
Grifols estimates pro-forma total annual revenues to approach USD1.0bn (EUR740m) (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 per cent of the group's total income, compared to the current 4 per cent, 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 employees.
The operation will strengthen Grifols' diagnostic division, particularly in US. 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.
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 US. 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 immunohematolgy activities"
The transaction´s financing is fully underwritten. A bridge loan for USD1.5bn 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.
The transaction, requiring customary regulatory approvals, is expected to close in the first half of 2014.