Galderma Surges in Debut, Bolstering Europe IPO Recovery
(Bloomberg) — Skin-care company Galderma Group AG soared 21% on its first day of trading, delivering a much needed win for Europe’s equity capital markets.
The EQT AB-backed company closed at 64 francs in Zurich on Friday, valuing it at more than 15 billion Swiss francs ($16.7 billion), following Switzerland’s biggest initial public offering of the past two decades. Galderma had priced its IPO at 53 francs share, the top end of a marketed range.
The listing success is a sharp contrast to that of German perfume retailer Douglas AG, which tumbled 11% in its inaugural session Thursday, in one of the worst showings for a large listing in the past two years. Douglas slid a further 3.6% on Friday.
Europe’s IPO market has been subdued since early 2022, with issuers and investors alike sitting on the sidelines, spooked by volatile markets, the surge in interest rates and poor returns from the region’s listings. Now with stock indexes reaching record highs, a host of companies are plotting second-quarter share sales.
“The listing and the positive reaction on the market this morning prove once again that there is an appetite for this kind of operation,” John Plassard, a director at Mirabaud, said. “It also shows that the IPO window is still open. This is due to the rise in stock market indices and the attraction of investing in equities rather than bonds.”
Galderma raised almost 2 billion francs by selling 37.2 million new shares, and it plans to use the proceeds to repay and refinance debt. The rest came from the sale of existing shares, including an over-allotment option.
China Growth
In February, Galderma announced record 2023 net sales of over $4 billion, up 8.5% year-on-year. International markets grew 12.3% year-on-year on a constant currency basis, driven by a strong performance in China, India, Brazil, UK, and Mexico.
“In markets like China, we are just at the beginning of what we see as a significant growth opportunity,” Chief Executive Officer Flemming Ørnskov said in a Bloomberg Television interview. “Even if consumer spending slows, we feel confident, given we have kept beating market expectations and gaining market share.”
The listing is a success for EQT, which has been exploring an IPO of the business since 2021, with volatile markets delaying its plans. The buyout firm led a consortium that acquired Galderma for 10.2 billion francs in 2019, and it will remain a large holder.
The IPO at 2.3 billion francs is about the same size as Landis+Gyr Group AG’s 2017 offering. Switzerland hasn’t seen a bigger listing in franc terms since Petroplus Holdings AG in 2006.
Galderma was founded in 1981 as a joint venture between L’Oreal SA and Nestle. The company is best known for skin-care products, particularly its popular Cetaphil range, as well as Alastin. The larger chunk of its revenue comes from so-called injectables – a fast-growing segment encompassing treatments such as Botox and fillers.
–With assistance from Anna Edwards and Guy Johnson.
(Updates with closing shares.)
©2024 Bloomberg L.P.
