Sartorius expands gene therapy technology business with billion-euro takeover – Sartorius share under significant pressure | 03/31/23

The DAX group

Sartorius wants to buy the French company Polyplus for around 2.4 billion euros through its subsidiary Sartorius Stedim Biotech, as Sartorius announced on Friday in Goettingen. Polyplus was previously owned by private investors. For Sartorius, it is the largest acquisition in the company’s history.

Because the group is also considering a capital increase to finance the deal, the news before the weekend was initially not well received by investors. The preferred shares fell by noon at a discount of almost seven percent to the end of the leading German index Dax. The price losses of the French subsidiary Stedim Biotech in Paris were similarly high.

According to the announcement, the parent company Sartorius will receive a bridge loan from the US investment bank JPMorgan for a transitional phase to finance the transaction. The funds are passed on to the daughter. The plan was to refinance this loan through long-term financial instruments, it said. This could also include an equity component at Stedim level, the company said on request. There was no information about the possible timetable.

A possible capital increase threatens to dilute the profit accruing to the shareholders. However, the financing of such large takeovers through a capital increase is not unusual. If management’s growth calculus works, the share dilution could more than make up for it over the long term. The chances of this are good, because Sartorius is targeting a growing segment with its takeover. Cell and gene therapies are increasingly being used in the fight against cancer and rare diseases, and are seen as a beacon of hope for many patients. Experts see a lot of potential here in the coming years and decades. In addition, Polyplus is a leader in its field, said a Sartorius spokesman.

According to the information, the French company is growing strongly. Sales in the upper double-digit million euro range are expected for 2023 and a “very high” profit margin before interest, taxes, depreciation and amortization (Ebitda).

Polyplus, based in Strasbourg, recently employed around 270 people and, in addition to France, has locations in Belgium, the USA and China. It develops and produces important DNA and RNA components for the production of viral vectors, which in turn are used in cell and gene therapies as well as other new medical therapy methods.

“Polyplus’ innovative solutions are highly complementary to our portfolio, particularly with regard to our range of cell culture media and critical components for the development and manufacture of novel therapies,” said Sartorius.

The Dax group takes over the French company from private investors, which include the investment companies Archimed and WP GG Holdings IV BV from Warburg Pincus. As usual, the takeover is still subject to approval by the regulatory authorities. Subject to their approval, Sartorius aims to complete the acquisition in the third quarter. !– sh_cad_2

In XETRA trading, Sartorius preferred shares fell 4.49 percent to €391.10 at times.

GÖTTINGEN (awp international)