Sygnis: Electrifying Sales Potential
Edison | May 19, 2016 09:10AM ET
Sygnis Pharma AG (DE:LIO1k) intends to acquire a private UK proteomics company, Expedeon, funded by issuing up to 20.5m shares. Sygnis produces innovative molecular biology kits, while Expedeon makes well designed but standard consumable 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%. The deal will complete in mid-year and integration and training will take some months. Sygnis expects to see sales synergies from 2017 and might achieve profitability if sales grow to about €7m with well-controlled costs. Sygnis had Q116 sales of €0.1m and cash of €3.4m.
Expedeon financials and deal structure
The purchase price for Expedeon appears to be about €24m (£19m), about 7x its 2016e sales of €3.5m as guided by Sygnis, up from €2.5m in 2015. Sales of €1.7m might be consolidated in the H216 results. Expedeon’s EBITDA margin in 2015 is stated to be 13%, or about €325k, suggesting a purchase price of about 70x 2015 EBITDA. The margin may increase to 15% in 2016. Sygnis intends to issue up to 20.5m shares (including a rights offering to raise €5m cash) to fund the acquisition. Only 7% of the acquisition price will be paid in cash, with the rest paid in equity under a 12-month lock-up.
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