Gerresheimer acquires Sensile Medical

Gerresheimer is expanding its business model with the acquisition of Sensile Medical AG, Switzerland ("Sensile Medical") based on a share purchase agreement signed today, moving towards an Original Equipment Manufacturer (OEM) for drug delivery platforms with digital and electronic capabilities for pharmaceutical and biopharmaceutical customers. Sensile Medical develops innovative drug delivery products and platforms for medication administration, including digital networking. Sensile Medical is already working very successfully with customers on the development of devices for diabetics and patients with heart conditions. The purchase price will be a maximum of EUR 350 million, depending on the achievement of contractually defined milestones. The initial payment amounts to EUR 175 million.

Regardless, Gerresheimer has secured two major new orders, one for the production of inhalers and one for pre-filled syringes for a large heparin manufacturer. On the other hand, Gerresheimer is losing a significantly smaller order in the inhalation sector, which will be followed by restructuring costs for the plant in Küssnacht (Switzerland), scheduled to close by the end of 2019.

Without Sensile Medical, the following changes arise in the planning of investments, profitability, and sales revenues: For the years 2019 and 2020, higher investments of an additional 2 percentage points up to a maximum of 4 percentage points of currency-adjusted sales revenues are expected, which will be used among other things for capacity expansion of the plant in Horsovsky Tyn (Czech Republic), further automation, and a new plant in Eastern Europe. At the same time, Gerresheimer expects that this will also lead to a burden on the adjusted EBITDA margin of approximately 1 percentage point in 2019 and 2020 (compared to the figure for the fiscal year 2017), due to low-margin sales revenues in the engineering and tooling business from the newly acquired large orders, as well as increased expenses for relocation, employee training, and the startup and ramp-up of production.

For the years 2021 and 2022, Gerresheimer also expects, without considering Sensile Medical, that both sales revenues will grow beyond the usual growth rate and the adjusted EBITDA margin will increase by 2 percentage points, and that the investment volume will return to around 8 percent.

Following the forecast given on 22.02.2018, Gerresheimer expects, without considering Sensile Medical, a strong second half of the current year and thus refines the forecast for currency-adjusted sales revenues at the upper end to EUR 1.38 billion to EUR 1.4 billion.