Siegfried (SIX:SFZN) saw its shares rise by more than 9% on Tuesday after the Swiss life sciences group disclosed an acquisition of drug-substance operations from Noramco and Extractas Bioscience.
The agreement brings three additional sites into Siegfried’s portfolio, located across Delaware, Georgia and Tasmania, and the company said the move raises its number of U.S. facilities to five. The purchased assets are reported to offer both large-scale commercial production and capabilities for early-stage development.
Stifel analyst Ed Hall characterized the transaction as "transformative," saying it dovetails with Siegfried’s EVOLVE+ strategy by connecting Purisys’ early-phase development platform with expanded production capacity in Wilmington and the company’s existing Pennsville site. In Hall’s view, the combination creates a more integrated service for pharmaceutical clients while also accelerating growth in Siegfried’s exclusive synthesis segment through Extractas’ specialised extraction expertise.
"From a strategic perspective, this transaction allows Siegfried to vertically integrate its service offering, combining Purisys’ early-phase development capabilities, which is complementary to Grafton, with the large-scale production capacity of the Wilmington and existing Pennsville sites to create a more holistic solution for pharmaceutical clients," Hall wrote.
According to the analyst, the newly acquired assets are largely opioid-based and include products such as buprenorphine, morphine and oxycodone. Hall noted this positions Siegfried as an important supplier within what he described as a "tightly regulated supply chain" where licences are difficult to obtain.
Financially, Stifel reported the deal was agreed at an attractive valuation - under 10 times EV/EBITDA - and is expected to be "immediately value-accretive." Funding for the transaction will come from a combination of Siegfried’s existing resources and newly raised debt.
Context and implications
The acquisition links development-stage capabilities with larger manufacturing footprints in ways that, according to the analyst commentary, create a more seamless offering for pharmaceutical customers. Extractas’ extraction expertise is cited as a catalyst for growth within the company’s exclusive synthesis operations.
Market reaction was positive on the announcement, with the stock moving sharply higher on the day the transaction was disclosed.