The laboratory chain based in Switzerland is for sale.
(Photo: imago images / Hans Lucas)
Frankfurt A good six months after the German laboratory chain Synlab went public, financial circles say Unilabs, one of its largest competitors, is up for sale. Owner Apax last week sent offer documents to potential bidders, especially other financial investors, as several people familiar with the matter said.
The Geneva-based company could be valued in a deal with around five billion euros including debt. The first bids are expected at the beginning of 2022, and Rothschild will organize the sales process. An IPO is currently not being planned. Unilabs, Apax and Rothschild declined to comment.
Unilabs was founded in 1987 by the entrepreneur Edgar Zwirn with the takeover of three laboratories in Switzerland, strengthened in the following years with various acquisitions and brought to the Swiss stock exchange. In 2007 the Swedish health company Capio acquired the majority and merged its laboratory diagnostics division with the Swiss. This is how one of the leading European laboratory service providers came into being under the name Unilabs.
Europe is still the focus of the company’s activities with 12,700 employees and an annual turnover of more than one billion euros. Unilabs is also active in the Middle East and South America. According to circles, the company expects earnings before interest, taxes, depreciation and amortization (Ebitda) of around 350 million euros for 2022.
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Competitor Synlab is currently valued on the stock exchange with around ten times the expected operating profit. Institutional investors put high discounts on this, as the currently booming corona test business will eventually decline, said a person familiar with the matter. On the other hand, it is to be expected that investment companies will adopt a somewhat more optimistic perspective.
There is great interest in the industry
Due to its size, Unilabs is interesting for large financial investors, possibly for teams of several actors or an investment company with a pension fund or sovereign wealth fund. The European financial investor EQT, which took over the French laboratory chain Cerba for 4.5 billion euros in the spring, is considered an interested party and could also draw synergies from a deal.
Two years ago, Apax had already tested the interest of other investors in Unilabs and had open ears from investors such as Ardian, Partners Group, I Squared and Macquarie, but then left the issue of sales resting for the time being.
Another deal shows how great the interest of financial investors is in the industry: On Wednesday Cinven announced the entry into Bio Agilytix, a laboratory company that offers bioanalytical services for pharmaceutical and biotech companies. The head office is in Durham in the USA, but the locations also include Hamburg. The valuation was according to financial circles at 2.5 billion US dollars.
Unilabs has three major business areas: In addition to laboratory services, there are radiology and pathology, which focus on the examination of tissue samples. Unilabs has 250 laboratories and 180 radiological centers, where almost five million imaging examinations and 213 million laboratory analyzes are carried out every year.
The European market is highly fragmented
The European laboratory diagnostics market is very fragmented. There are many small national and regional providers. Large multinational players are the Eurofins Group, based in Luxembourg, which achieved sales of around 5.4 billion euros last year, and Synlab, based in Munich, which achieved around 2.6 billion euros in sales in 2020.
The product range of the major suppliers is very different. While Eurofins Scientific also offers analyzes in the areas of food and feed, the environment and pharmaceuticals, Synlab has focused entirely on medical diagnostics. The demand for corona tests has allowed the company to grow disproportionately since the beginning of the pandemic. For the current year, Synlab, which went public in April, is aiming for sales growth of more than a third to 3.5 billion euros and an operating result of more than one billion euros.
The European market for laboratory diagnostics normally grows in the low single-digit percentage range every year. The market volume before the pandemic was estimated at more than ten billion euros.
More: Synlab expects billions in sales with corona tests