Original-Research: SYGNIS AG (von GBC AG):

Original-Research: SYGNIS AG - von GBC AG

Einstufung von GBC AG zu SYGNIS AG

Unternehmen: SYGNIS AG

ISIN: DE000A1RFM03

Anlass der Studie: Research Comment

Letzte Ratingänderung:

Analyst: Cosmin Filker; Felix Gode, CFA

- Planned acquisition of the proteomics company Expedeon

- Horizontal expansion of the product portfolio

- Strong synergy potential in the areas of product, sales, and production

- Expansion of the sales team for improved access to markets of the USA,

the UK, and Asia

- Reaching new levels of revenues and earnings

- Corporate action for the acquisition

SYGNIS AG plans to acquire the proteomics company Expedeon Holdings Limited

(Expedeon). An evaluation of the attractiveness of SYGNIS first acquisition

depends on several aspects, whereby the potential for synergies are of

primary concern.

The market for molecular biology is split into two parts, genomics and

proteomics. The product range of SYGNIS AG, and especially the two most

important product lines TruePrimeTM and SunScriptTM, comprises of the

development and commercialization of the new innovative products that focus

on polymerases, as part of the Next Generation Sequencing (NGS). Expedeon,

based in Swavesey (UK), develops, produces, and sells innovative

consumables for the analysis of proteins (proteomics).

After the merger of both companies, the new formation will cover both

markets with a very broad product range. This is particularly important,

because both companies serve similar customers (primarily research

facilities and laboratories), hence there are high cross-selling

potentials.

Strong synergetic effects are expected from the bundling of the production

and the manufacturing, thus a significant reduction in operative costs and

therefore an increase in earnings margin should be achieved. It is planned

jointly use Expedeons production facilities in the USA (San Diego) and in

the UK (Swavesey).

The most significant argument for the planned acquisition is the already

present access to already established distribution channels, as well as the

acquisition of an own sales team that goes along with it. Currently, SYGNIS

distributes its products through distribution partnerships, as well as

through their own distribution channels, mainly the online shop. Especially

with sales through distribution partnerships, SYGNIS AG has no influence on

the marketing intensity of the sales partners. Furthermore, high technical

support is needed for the complex use of SYGNIS products, which is only

provided in very limited ways by the non-exclusive sales partners.

Therefore, users have to reach out directly to SYGNIS' customer service in

Madrid or Heidelberg, which can be quite costly, depending on the country.

Considering this, establishing an own supra-regionally operating

distribution team would be necessary, although at great expense. In the

past SYGNIS AG already established distribution of the technologically

developed products as the most important criterion for growing sales.

The Expedeon group has at its disposal direct sales channels in the UK,

Germany, France, as well as the US, as their largest and most important

market for life science applications. Expedeon group drew over half of

their turnover from their own direct sales. SYGNIS AG could use the

distribution channels and the sales team of Expedeon group to significantly

increase the presence of their own products in the most important markets.

Moreover, Expedeon group has arranged various OEM agreements over the past

years. One of them is an OEM agreement with TANON, a Chinese market leader

in the proteomics segment, closed in December 2015. Through this agreement,

Expedeon group gains direct access to the Cinese market. Since SYGNIS

products could also be added to Expedeon's OEM agreement, this would lead

to a further expansion of sales revenues and global presence.

For financing the planned acquisition of Expedeon, during the general

meeting of SYGNIS AG on June 20, 2016 a capital increase will be decided

upon. It is planned that the share capital is increased by up to 20.54

million new shares. Existing shareholders will be granted subscription

rights with a relation of 9:11.

New shares not subscribed for by these subscription rights will be offered

to Expedeon shareholders for shares in kind of Expedeon shares (according

to the AGM invitation, up to 15.72m SYGNIS shares). In addition to the non-

cash capital increase, Expedion shareholders shall be granted EUR1.7

million as cash settlement.

The subscription price is expected to be set after the general meeting in

consideration of the latest prices of shares.

Information: In the course of a planned extensive research study we will

remodel our sales and earnings forecasts in consideration of the latest

transactions.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/13873.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Offenlegung möglicher Interessenskonflikte nach §34b Abs. 1 WpHG und FinAnV Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (4,5a,6a,7,10,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:

http://www.gbc-ag.de/de/Offenlegung.htm

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