Apotex Health Corp., Canada’s largest drug manufacturer, is gearing up for a significant initial public offering (IPO) that could elevate its valuation to approximately $5 billion. This information emerges from recent securities filings outlining a share issue and secondary stock sale valued at a minimum of $1 billion.
Details of Apotex’s IPO
The company plans to offer up to 50 million shares priced between $20 to $24 each. This sale represents about 20% of Apotex’s total 231 million issued and outstanding shares on a non-diluted basis. If successfully executed, this IPO would become the largest by value on the Toronto Stock Exchange since Definity Financial Corp. went public in 2021. It would also mark a historic moment as the largest IPO ever in the life sciences sector.
Company Background
Founded in 1974 by Barry Sherman, Apotex has its roots in Toronto, where five of its eight manufacturing facilities are located. Currently, around two-thirds of its 6,500 global employees work in Canada. The company plays a crucial role in the Canadian generic drug market, producing approximately one-fifth of all generic medications used in the country.
Recent Developments
- Apotex released its generic version of the popular drug Ozempic last week, becoming the first to make it widely available.
- The company has received tentative approval from the U.S. Food and Drug Administration for this drug, despite the main patent for Ozempic lasting until 2032.
Ownership and Fund Allocation
Following the IPO, SK Capital Partners LP, which holds a majority stake in Apotex, is expected to retain at least 57.1% of the shares. The Sherman family, through API Investment LP, will maintain a 14% ownership stake. The company aims to generate around $850 million through a treasury offering, while existing shareholders will sell approximately $150 million in a secondary offering.
Financial Insights
As of March 31, Apotex reported long-term debt of $2.9 billion. For the fiscal year ending on the same date, the company recorded a net income of $373.8 million on total revenues of $3.49 billion. Proceeds from the treasury offering are earmarked for debt reduction.
Underwriters and Legal Representation
The IPO is co-led by major underwriters including RBC Capital Markets, TD Securities, and Bank of Nova Scotia. The joint bookrunners for the offering are BMO Capital Markets and Jefferies Securities. Goodmans LLP serves as the Canadian lead counsel for the transaction.
Pricing for the shares is anticipated during the week of June 8, with the closing expected the following week. Apotex’s impending IPO is a significant step in its growth trajectory and could reshape the landscape of the Canadian pharmaceutical industry.
