Grifols, a multinational player in the plasma business, has faced a rough spell in the stock market this week after claims that it hid financial details from a bearish fund based in Gotham City. This piece lays out ten essential points to grasp the crisis. The discussion centers on one of Spain’s leading listed companies.
2.- Plasma work
Grifols ranks among the world’s largest producers of blood products. These products come from plasma, the liquid portion of blood. The family-owned company focuses on immunoglobulin therapies for immune deficiencies and autoimmune diseases, and on albumin used in surgery and emergency medicine, among other applications.
The firm reported revenue of 6.064 billion euros at year-end 2022 and employed over 24,000 people, with about 5,000 based in Catalonia. It operates 15 production sites, primarily in the United States and Spain.
3.- International expansion and debt increase
Originating as a small family laboratory, Grifols opened its first plasma fractionation plant in Barcelona in 1958 and began expanding overseas about thirty years later.
The company became the first Spanish firm to receive an FDA license in 1995, went public in 2006, and completed its first major acquisition in 2011: the American competitor Talecris, listing on Nasdaq.
Since then, further acquisitions followed, including the diagnostics business from Novartis, an entry into China with a stake in Shanghai Raas, and the purchase of the German firm Biotest, among others. These moves helped fuel a surge in debt, reaching 9.54 billion euros and yielding a leverage of approximately 6.7x EBITDA in Q3 2023, per the latest available calculations.
4.- Covid disruption and trouble for Grifols
The company reached valuation peaks earlier, trading above 34 euros per share in February 2020, before the Covid shock hit plasma supply and dragged the stock down. In response to material shortages, Grifols began acquiring plasma collection centers it previously relied on to produce plasma medicines, a move that added to its debt load.
5.- Restructuring and a sales push in China
In early 2023 Grifols sought cost reductions and debt relief through an employment regulation plan, with anticipated job cuts of 2,200 in the United States and 51 in Spain.
A year-end deal saw Haier Group acquire a 20 percent stake in Shanghai Raas for about 1.6 billion euros, with funds earmarked to lower leverage. Around this time executive power shifted to Switzerland, and the long-time architect of the Grifols expansion, Víctor Grífols Roura, stepped aside along with his public presence.
6.- Gotham report and the stock crash
Just as the group was tentatively coming out of the pandemic era, Gotham City Research published a report accusing the company of hiding debt and manipulating figures, sending the stock tumbling again. Grifols shares on IBEX 35 slipped after a period of decline since the report, despite a brief rally when the firm announced legal action against the bearish investor and his allegations.
The stock had been down significantly since the peak, and investors reacted to the new claims and ensuing legal actions. The chair and CEO, Thomas Glanzmann, contended that the consolidations followed international accounting standards and rejected claims that a family office was involved, noting that only a small portion of major owners are family members.
7.- Scrutiny and accounting questions
The Gotham report questioned the full consolidation of two acquisitions, Haema and Biotest, bought in 2018 and later restructured. Gotham also raised doubts about the consolidation of Grifols Diagnostics Solutions in the United States and Shanghai Raas, noting disputes about economic and political rights since 2020.
8.- Market authority involvement
The National Securities Market Commission (CNMV) requested additional information on Gotham’s reported operations. Grifols pledged to respond promptly within the ten-day window after its Wednesday meeting. The role of the stock market auditor remains pivotal; any deeper questions about the company’s accounting could deepen market turmoil.
9.- A strategic US-focused company
The crisis takes on particular weight given that the U.S. government views Grifols facilities in Spain as strategically important. Federal documents from a 2010 era leak highlighted the Parets del Vallès facility in Catalonia as a key asset, alongside other strategic connections in the region.
These assets underscore Grifols’ significance for an American multinational with deep ties to Spain, including the link to energy and regional logistics critical to operations in North America.
10.- What lies ahead
The road forward is uncertain as the company works to clarify lingering questions about how quickly it can navigate the current market strain and whether relief will come in weeks or months. Plans to reduce the debt ratio to around four times EBIT in 2024 provide a benchmark, while the upcoming year-end 2023 accounts are expected to show a positive outcome, a point Grifols has repeatedly underscored. A key moment will come at the end of February when the group presents its 2023 accounts.
Cited analysis notes that Grifols remains under close watch in North American markets where its operations are highly strategic for partners and customers across Canada and the United States. Market observers stress a careful read of the CNMV briefings and the fiscal disclosures as the company maps a path through the current crisis and toward longer-term stability.