Singapore’s Sovereign Wealth Fund Takes 1/3 Stake In Grifols’ US Subsidiary For $1 Billion

Grifols

Grifols has announced that it has entered into a corporate transaction whereby GIC, Singapore’s sovereign wealth fund, will invest approximately $1 billion (€840 million) in Biomat USA, Inc, the Spanish firm’s wholly-owned US subsidiary.

In return, Grifols will acquire a minority stake in Biomat, through newly created non-voting preference shares. Biomat (together with its subsidiaries) has a plasma collection business with 296 plasma collection centres in the US. Grifols will continue to control all aspects of Biomat’s management. Furthermore, through a long-term plasma supply contract, all plasma collected by Biomat and its subsidiaries will continue to be supplied to Grifols for the production of plasma-derived products.

Grifols will use all the funds from the GIC investment to repay debt, approximately 14% of the €6.2 billion of net financial debt held by GRF at end-March, for a leverage level of 5.1 x EBITDA.

Although it is not known what percentage of Biomat has been sold, some market sources put it at between 30% and 35%. After this transaction, the Spanish multinational could have debt levels of around €5.2 billion and a net debt/EBITDA ratio of 4x.

The transaction was well received by the market yesterday, with Grifols closing up 0.6%, although it rose nearly 3% over the session. It is pending regulatory approval, including authorisation from the Committee on Foreign Investments in the United States (CFIUS).

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.