November 19th, 2019 | 07:35 CET
Expedeon AG before sale of a division to Abcam plc
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Cash inflow through transaction
On November 11, 2019 Expedeon AG reached an agreement with the online antibody distributor Abcam plc on the planned sale of the immunology and proteomics businesses. Should the deal be approved at the extraordinary general meeting scheduled for December 19, 2019, the transaction is expected to close on January 1, 2020.
According to the agreement, a purchase price of EUR 120 million in cash is to be paid for the acquisition of the two businesses, whereby an amount of EUR 105.6 million is due for immediate payment and a balance of EUR 14.4 million is to be paid over a period of two years.
Acquisitions before successful disposal
The business segments that are thus up for sale were acquired by Expedeon AG in the past financial years as part of the intensive M&A activities. The electrophoresis supplier C.B.S. Scientific was acquired at the end of 2016, starting with the acquisition of the proteomics specialist Expedeon in 2016, which has since given its name to the company. These acquisitions were followed by the acquisition of Innova Biosciences (2017) and TGR Biosciences (2018), both active in the field of protein measurement.
In total, the purchase price of these four companies amounts to EUR 39.8 million and is thus well below the sales price of around EUR 120.0 million that has now been achieved. The current market capitalisation of Expedeon AG at a share price of EUR 1.62 is EUR 84.73 million and would also be significantly exceeded by the purchase price.
Turnover drops after exit
According to the reports of GBC Research, the businesses and products held for sale are responsible for around 90% of annual Expedeon sales and should make a clearly positive contribution to earnings. With annual sales of these products expected to reach around EUR 14.4 million in 2019, this would result in a purchase price multiple of more than 8.
With regard to the key operating figures, the coming financial year would be characterised by the loss of most of the sales revenue and earnings contribution. In 2020, the company is expected to report only about 10% of the current sales level, i.e. around EUR 1.6 to 2.0 million.
Cash per share exceeds market price
Should the transaction be brought to a successful closing, as the experts at GBC Research assume, Expedeon AG would have liquid assets of EUR 120 million, which would provide considerable financial leeway. This would amount to a liquidity of EUR 2.29 per share.
Until the experts at GBC can make a concrete assessment of the remaining business, they will also confirm their previous price target of EUR 3.20 per share. They continue to award the Rating BUY.
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