GIC Invests $1 Billion into Grifols’ Plasma Business

Singapore sovereign wealth fund GIC is investing $1 billion into US plasma business Biomat USA, a subsidiary of the Spanish global health care company Grifols, that will buy the allocator a minority stake in the firm.

Grifols will use the investment to pay down the firm’s obligations as it aggressively expands its plasma business in the US, the company said Thursday. At the end of the first quarter of this year, the firm had about $7.3 billion (€6.2 billion) in net financial debt.

“This transaction supports Grifols’ business model and our strategy in plasma collection, together with a solid innovation portfolio focused on disease management beyond the therapies based on plasma-derived medicines,” Grifols’ co-CEO Víctor Grífols Deu said in a statement.

Grifols, which already manages nearly 300 plasma collection centers in the country, has been pushing deeper into the plasma business through acquisitions over the past year. Investor interest in plasma jumped during the pandemic, since any antibodies floating in the blood of patients who recovered from the coronavirus can be used to treat those who are fighting the disease.

Grifols expects demand for plasma medicines and therapies will only grow. This year, Grifols is planning on opening up to 20 new plasma centers. This is in addition to moves it made in April, when Grifols acquired seven plasma centers in a $55 million transaction from biopharma firm Kedrion. In March, Grifols bought 25 plasma donation centers from BPL Plasma in a $370 million transaction.

In March, Grifols also finished acquiring biopharmaceutical company GigaGen in an $80 million transaction that will support the firm’s research and development of vaccines, including those for the coronavirus. The firm has been encouraging patients who have recovered from the coronavirus to give plasma.

“With robust demand for Grifols’ plasma proteins, our efforts remain centered on doing our best to respond to the needs of patients and health care professionals,” Deu added.

Health care and life science properties are promising sectors for investors such as GIC, which may be looking for returns that are also recession-proof. As far as real estate properties go, life sciences assets are particularly resilient to economic downturns. Tenants may leave other properties, like offices during the pandemic, but workers are unable to easily leave specialized laboratories with custom interiors.

Still, capitalizing on the opportunity requires highly knowledgeable investment managers who understand the sophisticated assets.