Sygnis: Bigger, Stronger, Faster
Edison | Sep 20, 2016 12:40AM ET
Following the acquisition of Expedeon, Sygnis Pharma AG (DE:LIO1k) expects to achieve profitability in 2017 if sales grow to about €7m; management is focused on achieving sales synergies and controlling costs. The acquisition was funded by issuing 20.54m shares at €1.10 each including a cash fund-raising of €5.3m gross. Sygnis produces innovative molecular biology kits, while Expedeon makes well-designed products for protein analysis. Expedeon has a UK- and US-focused, 13-person sales and marketing team and a five-year sales CAGR of about 20%. Integration and sales training will take most of 2016. Guidance on sales is expected in November 2016.
Expedeon financials and deal structure
The acquisition cost of Expedeon at the rights issue price of €1.10/share was €19.0m (£16.4m), about 4.6x its 2016e sales of €3.5m as guided by Sygnis, up from €2.5m in 2015. We estimate that sales of up to €1.7m will be consolidated in H216. Expedeon’s EBITDA margin in 2015 is stated to be 13% (about €325k), suggesting a purchase price of about 49x 2015 EBITDA. The margin may, we estimate, increase to 15% in 2016. The acquisition is crucial for the medium- to long-term profit potential.
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