Gotham gives the finishing touch to Grifols: the Catalan multinational receives a hard blow after chaining several crises

One of the games that is almost always found in arcades in the United States is Whack-a-mole: a machine from which moles come out in a disorderly manner and the player has to hit them with a mace. Grifols has been trying to get its head back for almost four years, since the effects of the pandemic plunged it into a debt and stock market crisis. But every time he tries, whack, a hammer blow reminds him that the problems are still there. This time the executioner has been Gotham City Research, an investment firm that claims to fight against corporate fraud, but also acts as a bearish fund, and which has published a report against Grifols that has seen its shares plummet this Tuesday by almost 26%. The American adventure is coming back to Grifols like a boomerang: it is in the United States where the Catalan pharmaceutical company, specialized in blood products, expanded in a big way, but it is also where the problems began during the pandemic due to its high debt, and where it now suffers. the accusations of the bearish fund.

The Gotham City Research report accuses the pharmaceutical company of artificially reducing its debt because in its accounts it completely consolidates two companies, Haema and BPC Plasma, which Grifols bought in 2018, but subsequently sold to Scranton Enterprises BV, an investment company linked to the company. Grífols family, already directors and former directors. Gotham City Research also doubts that Grifols can completely consolidate its US subsidiary, Grifols Diagnostic Solutions, since the Chinese Shanghai RaaS has controlled 45% of the economic rights and 40% of the political rights since 2020.

The Catalan multinational has reacted with two notes sent to the National Securities Market Commission (CNMV), stating that the accusations are false and that the audits carried out by KPMG prove it. Grifols states that despite selling the companies to Scranton Enterprises, it maintains operational control over them because it has a repurchase option, and, therefore, it can consolidate them in its accounts. In the second note, Grifols concludes that the only objective of Gotham City Research, “as a short-term fund that it is,” is to lower the price to obtain profits.

Although these messages have moderated the collapse – the stock ended up falling 25% this Tuesday, but during the day it fell to the lowest level of the last decade – the blow has been important for a historic company that It's hard to get your head out. The blow has been hard due to the delicate business moment (in the midst of a cost reduction and divestment strategy to reduce debt) and also because of the symbolic: it is a howitzer against the way in which Grifols has expanded internationally, one of the pillars of this company, along with family control, which the markets have already been responsible for diluting.

Family, Catalonia and international expansion

Grifols is one of the greatest representatives in the history of the Catalan pharmaceutical industry, and for more INRI, born twice. First in 1909, when the hematologist Josep Antoni Grífols Roig founded an analysis laboratory in Barcelona that was successful due to patents on blood transfusions and blood products in a period, that of the European wars, when they became very necessary. He himself founded Laboratorios Grifols in 1940, together with his two sons, Josep Antoni and Víctor Grífols Lucas, a company that grew and that in 1960 found its first partners in the United States. It was a member of the third generation, Víctor Grífols Roura, who insisted the most on this path and took the company to the size it has now. He joined the company in the seventies, after the death of his uncle Josep Antoni, and he did so precisely by working with American partners. In 1987 he took over the company and created the holding company Grifols Group.

The relationship with the United States was fruitful. In the nineties, Grifols became the first Spanish company to receive a license from the Food and Drug Administration (FDA), and continued its expansion in that country. In 2002 it acquired SeraCare (now Biomat), and its 43 plasma donation centers in the United States—precisely, BPC Plasma, which the Gotham City Research report has focused on, is a subsidiary of Biomat. The following year it bought the assets of Alpha Therapeutic, including a plasma fractionation plant in Los Angeles, and in 2011 it made the important purchase of the American Talecris Biotherapeutics and began trading on the Nasdaq. In 2017, it also bought Hologic in that country, and two years later it expanded its donation centers. These and other purchases (especially the German Biotest), gave it great size, but also a considerable debt, of 9,000 million euros.

The pandemic had a full impact on their activity: not being able to leave home, the plasma donation centers, especially the extensive network in the United States, were emptied, and the entire operation suffered. The markets, which until then had approved the company's debt strategy, raising it to its maximum value (34 euros) in February 2020, suddenly became worried, and the stock fell to its minimum in October 2020. 2022, less than 9 euros. The changes in governance were immediate: first Víctor Grífols Roura, the architect of the expansion, stepped aside, and then the family handed over all executive positions to the CEO, Thomas Glanzmann. The last step was taken by Víctor Grífols Roura a few days ago, when he left the council.

One of the keys to the importance of Grifols for the United States is that, as revealed by Wikileaks in 2010, the US Government considered that one of Spain's three strategic assets was precisely the Grifols plant in Parets del Vallès. There is now no shortage of voices suggesting that the United States does not mind the fact that Grifols collapses on the stock market for geopolitical reasons, since its American subsidiary, Grifols Diagnostic Solutions, continues to have a non-majority stake in Shanghai RaaS, despite the fact that Grifols now It only owns 6.5% of the Chinese company, after selling 20% ​​of this company a few days ago.

Investments in cava or basketball

But Grifols has not only looked at the United States (where it concentrates 60% of its investments and where more than half of its income comes from). The founding family has always had an eye on Catalonia and has been active in Catalan social and business life, despite having moved its headquarters to Ireland, a country with lower taxation. His activity has been public—when Víctor Grífols Roura said “move forward, don't give up” to former president of the Generalitat Artur Mas, who was preparing the 2014 independence referendum—and private: through Scranton Enterprises he has invested in several companies and technology funds. and in the health field, in the cava firm Juvé & Camps, in the paper industry company Iberboard and in the real estate companies BeCorp or the luxury apartment developer Francesc Macià 10. In 2018, the company also bought the club Joventut de Badalona basketball team, which saved him from ruin.

Based in Amsterdam, Scranton Enterprises is the investment company that owns 8.67% of Grifols shares, and is controlled by members of the founding family and by directors and former directors of the company. Its main assets are Haema and BPC Plasma, which provide almost all of its income. It is one of the vehicles with which the family continues to control almost a third of the shares of the multinational: there is also the Deria company (which concentrates the participation of Víctor Grífols Roura and his four brothers) with 9.2%, and the companies Ponder Trade and Ralledor Holding Spain, which represent other family branches, and have 7% and 6.15%. These companies are followed in importance in Grifols' shareholding by
three large funds: Capital Research and Management (5.65%), Blackrock (3.9%) and Europacific Growth Fund (3%).

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