Twelfth day of my "3 reasons to own" series, today with a fast-growing German/French biotech supplier, Sartorius Stedim. Sartorius Stedim is a subsidiary of the German Sartorius AG and does the BioProcessSolutions business (accounting for 80% of revenue for the mother).
1st reason: Sartorius is a successful serial acquirer the have set the following strict M&A Criteria
- Complementary products or technologies
- Either among the Top 3 or USP
- Management capacity and cultural fit
- Fair valuation, reach Groups profitability level in 2-3 years
2nd reason: Being a supplier for a fast-growing industry with a lot of risk makes Sartorius an attractive investment for me. Biotech is a fascinating industry, but I'd never invest in an individual pharma/biotech company. I just see the risk/reward in spending bilions of dollars on research and go through the 5+ year process of getting through all 3 phases of drug approval too risky. Sartorius is a leader in a lot of these processes and profits regarless who wins. Similar too my other investments
$VEEV and
$DHR.
3rd reason: Most of Sartorius revenue are single use products, which serve as a subscription model. Recurring revenue is always preferable, making revenues a lot more predictable.
Unlike the name would suggest, single-use products are actually also better for the environment in many ways.
I hope you enjoyed this post about a not too well known company.