Scranton, an unknown investment company under Dutch law, has become the Achilles heel of the Grifols group in recent days, following the report by the vulture fund Gotham City Research that accused it of falsifying its accounts and assured that there are irregular operations between both signatures. Scranton, 20% controlled by brothers Víctor, Raimon and Albert Grifols Roura, has 22 investors and controls 7.49% of the pharmaceutical company's capital.
“We were born to help Grifols where the company could not reach,” says one of its shareholders, who asked not to be identified. Thus, Scranton has “accompanied” the pharmaceutical company in various transactions, purchasing a part of the assets or in sale operations.
Scranton was born in 1999, when the American company Alpha Therapeutics, which had 50% of the capital of Grifols, decided to sell this share. To avoid the sale, the Spanish partners had to buy the shares held by Alpha. So the Grifols brothers and around twenty managers, family members and friends, such as Tomàs Dagà, founder of the Osborne Clarke law firm, joined forces with the investment bank William Blair and created Scranton. With very little capital (600,000 euros) they bought 16% of the shares, with debt guaranteed by the securities themselves, while MGPE, a Deutsche Bank manager, bought the other 34% that Alpha controlled. Spanish investors later bought William Blair's stake, while Deutsche Bank sold its shares in the IPO in 2006, leaving the family, and the Scranton investors, as the group's only permanent shareholders, with the control of about 30% of the capital and 40% of the voting rights.
Grifols also turned to Scranton to finance the purchase of Talecris, an American company for which it paid 2.8 billion euros in 2011. Thus, it sold the office buildings, warehouses and factory in Clayton (United States) to this investment holding company in an exit operation
Scranton was again key in 2018, when two of the few independent companies that manage plasma collection centers in Europe and the United States were put up for sale, and Grifols decided to buy them even though it had to refinance 5.3 billion euros with the bank. of debt, to become a world leader in donation centers.
Thus, Grifols bought three companies that own 59 centers: BPC (Biotest) and Haema Germany and Hungary, for 469 million euros, and months later it sold them to Scranton for the same price and paid it an irrevocable purchase option to repurchase them for the same price at any time and manage them for 30 years. He also gave Scranton a “seller loan,” which today amounts to 98 million euros, at the request of Bank of America, the entity that lent Scranton the funds it needed to buy those companies.
Grifols attempted a similar operation to externalize assets and debt, but on a larger scale, in 2021 with GIC, the Singapore sovereign fund, to which it sold a minority stake in its American subsidiary Biomat for 1 billion dollars (840 million euros). with an option to buy it back. The auditor, KPMG, however, did not endorse this operation and forced the accounts to be reformulated so that GIC's investment counted as debt. Grifols' creditor financial entities did agree not to include it in the debt commitments or covenants agreed upon in 2019, as explained by the financial director, Alfredo Arroyo.
Since 1999, Scranton has grown in the shadow of Grifols, driven by the growth of the group, which from the 211 million euros it billed then has risen to 6,064 million in 2022. And thanks to the dividend that the pharmaceutical company contributed, which in 2020 It reached 19 million euros, and the rental of the headquarters and plasma centers, it was able to become one of the most relevant family offices in Catalonia.
According to Scranton's 2022 accounts, audited by the Dutch firm PKF Wallast, to which La Vanguardia has had access, the group had assets of 1,232 million euros, but its purchase was financed mainly with debt: 877 million euros owed to The bench.
The holding company focused its investments on real estate development and venture capital (investment in emerging companies or in restructuring): businesses that initially consume capital – which the holding company provides by giving loans to its subsidiaries – but do not generate income. Therefore, starting in 2021, the rise in interest rates and the suspension of Grifols' dividend have strained its financial structure: in 2022 it had an operating result of 26 million and paid 34 million in interest.
The stock market and reputation crisis caused by the Gotham accusations come at a difficult time for Scranton, forced to refinance its debt, with 388 million euros due next July to Bank of America.
According to the audit, this entity is the group's main creditor, followed by Banco Santander (250 million) and CaixaBank (40 million). The group has mortgages on its real estate assets and, as collateral for the loans, it has pledged the shares of its subsidiaries, including those of the plasma collection centers, its own, as well as a package of Grifols shares. In 2021, he even requested a loan of 173 million guaranteed with shares of Deria – an investment company of the Grifols Roura brothers – to put them as collateral for a loan, which he returned the following year.
Now the CNMV, in the investigation it has launched following Gotham City Research's accusations, has also asked Scranton to provide information about the relationships it maintains with Grifols. Financial sources acknowledge that the regulator wants to ensure that the pharmaceutical group is not a guarantor of any of Scranton's loans, and that in any case it would be the shareholders of Scranton and the founding family who would lose their shares in favor of the creditor bank in the event of that the investment holding company had liquidity problems.
