Advertising. The pharmaceutical and laboratory supplier Sartorius, which is listed in the MDAX®, wants to continue to grow dynamically. To this end, the management is also taking the means of acquisitions and, after purchasing certain activities of the US group Danaher and the majority in the Israeli cell culture media manufacturer Biological Industries, recently announced the acquisition of the Slovenian purification specialist BIA Separations for 360 million euros. The new acquisition is to be incorporated into the subsidiary Sartorius Stedim Biotech and the transaction is planned to be completed by the end of the year. Analysts describe the acquisition as by no means cheap. In addition to expanding the product portfolio, the decisive factor is obviously the technological expertise in the purification and analysis of biomolecules for cell and gene therapies. Measured against the current market capitalization of Sartorius of a good 24 billion euros (as of December 8, 2020), however, this is a smaller takeover.
As a beneficiary of the COVID-19 pandemic, the global group with headquarters in Göttingen is enjoying high demand and can look back on full order books. Sartorius products are used, for example, in the manufacture of vaccines and antiviral drugs. Accordingly, the laboratory equipment supplier was able to shine with its latest set of figures, which is particularly driven by business with the biopharmaceutical industry. In the first nine months of 2020, consolidated sales climbed 23.9 percent year-on-year to 1.68 billion euros, with takeovers and pandemic-related effects each contributing six percentage points to growth, according to the company. Incoming orders increased even more at a rate of 36.3 percent to 1.96 billion euros. The adjusted operating result (Ebitda) rose by 35.3 percent to 489 million euros and the consolidated net profit by 37.9 percent to a good 211 million euros.
As a result of this growth, management also increased its forecast for the full year 2020. Now, sales growth should reach or even exceed the upper limit of the recently targeted range of 22 to 26 percent. And for the operating margin (Ebitda), management is now forecasting 29.5 percent instead of the previous 28.5 percent. Analysts emphasize that Sartorius has an intact business model thanks to the uninterrupted market dynamics and clever acquisitions. However, due to the currently high valuation premiums, the share is only classified as a hold position.
Reverse convertible bonds are generally ideal for investors who generally share a positive assessment of Sartorius and who want to implement their strategy with a fixed interest rate, quick partial repayment and a bullet buffer. As a more conservative variant, DuoRendite Reverse Convertible bonds expose only half the nominal amount to market risk and generate high returns even if the underlying asset stagnates.
2.70 percent p.a. Fixed interest and market risk only for half the nominal amount
The DekaBank 2.70% Sartorius DuoRendite Reverse Convertible 01/2023 (WKN DK0YR0) pays 2.70 percent interest after one year based on the nominal amount of 1,000 euros. At the same time, the investor receives half of the nominal amount (500.00 euros) back regardless of the market. The remaining nominal amount portion (EUR 500.00) will continue to bear interest at 2.70 percent in the following period and will also be repaid in full if the Sartorius share for the final valuation on January 6, 2023 is at least the base price (90.00 percent of the starting value ) closes.
Otherwise there is a risk of losses on repayment because instead of the second half of the nominal amount, Sartorius shares that have fallen in value are transferred to the investor at 90 percent of the starting value. As with any bond, the issuer risk must also be considered. This means that, especially in the event of DekaBank’s insolvency, there is a risk of losses or even total loss.
The subscription runs from December 14th, 2020 to January 8th, 2021, subject to an extension or shortening.
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As Head of Private Banking and Product Management at the Deka Group, Hussam Masri is responsible for product development and product management of mutual securities funds, asset management and pension products, certificates and private banking.