Spanish Healthcare Firm Grifols Leads European M&A

Spanish Healthcare Firm Grifols Leads European M&A

Spanish Healthcare Firm Grifols Leads European M&A

The global healthcare industry is seeing a wave of M&A as large drugmakers shed non-core activities, while also trying to boost their new drug pipelines by buying smaller firms.

Barcelona-based Grifols, the world’s third largest blood products maker, has hit the headlines again with its $1.68 billion buy of Novartis’ blood transfusion testing unit.

The acquisition will give critical mass and a significant US presence to Grifols’ previously small diagnostics business, which in future will account for 20 per cent of revenues, up from 4 per cent currently.

Grifols is one of the top fifty pharmaceutical companies worldwide and amongst the most innovative, according to Forbes Magazine.

Through a combination of organic growth and strategic acquisitions, Grifols has grown from a predominantly domestic Spanish company into a global powerhouse.

SPANISH OVERSEAS SUCCESS STORY

Founded in 1940, Grifols was hungry to expand, and became one of Spain’s most important multinationals by 2000, following in the footsteps of banks like Santander and fashion retailer Inditex.

In 2010, the company made a bold move to expand its business in blood-derived products with the purchase of US-based Talecris Biotherapeutics. The $3.4 billion cash and shares deal was the third largest in the pharmaceutical sector that year and worth over a billion dollars more than Grifols itself. The acquisition was transformational for Grifols, adding market share in the US and Canada to the Spanish healthcare company’s leading position in Europe.

The company has three main divisions: bioscience, diagnostic and hospital. These develop, produce and market innovative products and services to medical professionals in over 90 countries.

One of the driving forces behind Grifols’ acquisition strategy is to consolidate its position as a vertically integrated company. The purchase of part of Novartis’ diagnostic division will complement and extend the Spanish firm’s existing product range. Grifols will be able to provide solutions for blood and plasma donor centres, with the most complete product portfolio in the immunohematology field.

This already includes cutting-edge technology from Spanish biotechnology firm Progenika. Grifols bought 60 per cent of this company in May this year.

INVESTING IN THE FUTURE

Running in tandem with Grifols’ acquisition strategy is its commitment to research and development investment. In 2012, the company earmarked 124.4 million euros for R&D, equivalent to 5 per cent of sales revenue.

It also invested 156 million euros to expand and improve its manufacturing facilities.

So what’s next on Grifols’ wish list? Amidst the current pace of deal-making in the healthcare sector, more M&A is undoubtedly in the cards. Some sector experts expect vaccines to be the next area of focus for dealmakers.

For information on M&A in Spain’s healthcare industry, contact corporate law firm Argali Abogados.

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