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Finland’s Biohit Healthcare approaches a turning point

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Biohit has been listed on the Helsinki Stock Exchange since June 16 1999, but nothing much happened to this biotechnology stock until new CEO Semi Korpela (CFO 2003-2005 at Biohit) joined in December 2011. 2012 was a success with new distribution deals made worldwide with company’s core products: Acetium, GastroPanel and diagnostic quick tests.

Biohit’s stock price reacted positively and it was trading as high as 7.84 in January 2014. Since then the stock was in steady decline until April 2018 when Chinese owned Biohit Healthcare (Hefei) Co. Ltd. bought a roughly 32.87% stake of the firm and a seat on the board. In 2018 the stock was trading near 5.0. The Chinese investors acquired both A-shares and B-shares from Osmo Suovaniemi, the founder and still controlling chairman of the company (with 56.39% voting rights). Suovaniemi is now 75 years old.

We think 2020 will bring the Chinese interest to the close and they will finalize the buyout of the company.
In 2003 Suovaniemi had the most patents in Finnish patent history (160 years of records) with 63 patents and 99 pending. What the Chinese are buying is a lifetime of work and patents of from Suovaniemi and his team of the Finnish biotechnology researchers.

Biohit Oyj (www.biohit.com) has two subsidiaries in Europe, BIOHIT Healthcare (www.biohithealthcare.co.uk) and BIOHIT Healthcare srl (www.biohithealthcare.com/it/) – both companies have supplied diagnostic tests, health products and services to improve the care of digestive diseases and ease patient management in these markets and worldwide.

Biohit’s slogan says it all: “Through innovation, we change lives.”

The stock is now trading at the 3.23 level in December 2019 and the current management has an interest to sell because they have a lucrative option plan in place. The stock bottomed on October 4, at 2.23. We think this could be an interesting entry point as it is an opportunity to be part of this deal before it happens.

The Chinese investors look likely to acquire the entire company and we may even see it de-listed as per similar acquisitions in Finland in the past – e.g. Amer Sports, which was purchased by Chinese investors this year, and which saw a 40% premium paid on its stock. Amer Sports was delisted from the Helsinki Stock Exchange in September.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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