Colostomy bag and wound dressings maker ConvaTec has announced plans to raise $1.8bn (£1.40bn) through a stock market listing in London amid a resurgence in IPOs in the City.
The flotation will be the biggest in the healthcare technology sector in the UK so far this year, according to data from Thomson Reuters Eikon.
The company will use the windfall to pay down debt, while private equity owners Nordic Capital and Avista Capital Partners will offload part of their stakes in the business.
Reading-based ConvaTec, which was founded in 1978, has 9,000 employees and operates in more than 100 countries. It makes medical products, such as specialist wound care dressings, endotracheal tubes, colostomy bags and catheters. In the UK, it employs 1,000 staff and carries out all of its R&D work in North Wales.
Avista and Nordic Capital bought ConvaTec from US pharmaceuticals giant Bristol-Myers Squibb in 2008 for $4.1bn (£3.18bn).
The company’s net debt is more than seven times its adjusted cash profits, or £3.32bn. After the IPO, this will drop to 3.5 times, or £1.66bn.
In the year to December 2015, the group generated annual revenues of $1.65bn, on which it made an adjusted operating profit of $436.8m.
The company wouldn’t disclose its listing price, but rival firm Coloplast, which is listed in Denmark, has a market cap of £13bn, with its shares trading hands at £60.5 apiece.
Paul Moraviec, chief executive, said ConvaTec operates in a growing market, driven by ageing populations which suffer from prolonged chronic health problems.
“To drive additional growth we are actively investing in the evolution of our product portfolio to deliver further benefits to patients and healthcare providers, and in pursuing opportunities to enter new markets.”
Sir Christopher Gent, former boss of Vodafone and ex-chairman of GlaxoSmithKline, will step into the role of chairman when ConvaTec goes public. Telegraph