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

GrifolsPossible claim of €54- 274M does not affect Grifols' credit history

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).

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