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

Planned takeover of another profitable company - Innova and SYGNIS product

ranges complement one another perfectly - Attractive acquisition price -

Capital increase planned for financing

According to a company announcement on 08 May 2017, SYGNIS AG is eying up

Innova Biosciences Ltd. ('Innova') for its next business acquisition, which

will further accelerate external growth. In the previous financial year,

the company was active in the M&A area with its acquisition of Expedeon

Holdings Ltd. and C.B.S. Scientific Company Inc., which have now been fully

integrated. Both acquisitions may well serve as a template for the planned

purchase of Innova.

According to its own statements, Innova Biosciences Ltd., located in

Cambridge (UK), is a leading provider of products in the area of protein

labelling, a process which is highly important for the measurement of

proteins. In addition, protein and DNA labelling is an important component

in the various steps of the NGS process (next generation sequencing) and in

protein analysis, from which there are obvious potential synergy effects

with SYGNIS AG. Since the acquisitions of Expedeon and C.B.S, SYGNIS AG now

covers the proteomics area as well as its original business field of

genomics, thereby including both key markets in life sciences.

SYGNIS AG should have dynamic growth rates in the coming financial years,

based in particular on accelerated external and product-related organic

growth. In accordance with our previous reports (see the research report of

25 January 2017), we expect strong sales growth in the current 2017

financial year as well as the achievement of the breakeven point during the

year. The breakeven point should be reached on a full-year basis for the

first time in the next 2018 financial year. Innova Biosciences Ltd. has an

annual sales level of about EUR 3 million, according to information from

SYGNIS, and is already highly profitable, with high margins and net income

for the year of EUR 0.5 million. In the 2016 financial year, Innova should

have achieved sales growth of about 20%, which is evidence of dynamic

business development. Innova should also continue to grow by at least 20%

annually.

Key figures of the transaction - Total acquisition price of up to EUR 12,8

million

According to a current company news release, the Innova transaction will be

financed by a capital increase. Through the planned issuing of 7.21 million

shares at a price of EUR 1.38, about EUR 10.0 million (gross) will be

raised. The planned cash portion for Innova shareholders of about EUR 8.00

million will be paid from this. In addition, it is planned to give a

further 2 million SYGNIS shares to Innova shareholders in the form of a

contribution in kind. If this contribution in kind capital increase has an

assumed issue price of EUR 1.38 per share, the acquisition price would be

EUR 10.8 million.

A further component of this transaction structure is a sales-based earn-out

of up to 1.5 million SYGNIS shares (750,000 SYGNIS shares per year

respectively) which will be awarded to previous Innova shareholders, as

long as growth targets are reached. This results in a value for the earn-

out component of EUR 2.0 million and thus the total acquisition price for

Innova Biosciences Ltd. will be EUR 12.8 million.

Valuation of the transaction - Inexpensive by comparison with peer group

The total acquisition price presented by us for the Innova acquisition as

well as the inclusion of the P/L key figures supplied by SYGNIS results in

a sales multiple of 4.4 and a multiple of 25.3 on the basis of earnings

after taxes. Both values are to be seen as relatively low according to our

peer group market comparison, and on this basis the acquisition price is

classified as very attractive. In particular, we have conducted a stand-

alone approach to Innova, omitting possible synergy effects in the

production, research, and above all, sales.

DCF valuation is also attractive

Along with this, we have also valued the attractiveness of the acquisition

price in the context of an indicative DCF valuation model for Innova

Biosciences Ltd. It should, however, be noted that only a limited amount of

data about Innova is available to us. Assuming sustained sales growth of

20.0%, a constant sales yield of 22.0% and capital costs equivalent to the

SYGNIS value, we have determined the fair value of the company (on a 2017

basis) to be EUR 30.00 million. Based on this valuation, we also classify

the purchase price for Innova as very attractive.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/15113.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

++++++++++++++++

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

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

+++++++++++++++

-------------------übermittelt durch die EQS Group AG.-------------------

Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw.

Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung

oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.

°