European private equity IPO door is only half open

Douglas AG

22/03/2024 11:24

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are her own.)
    By Aimee Donnellan
       LONDON, March 22 (Reuters Breakingviews) - Buyout firms
tested the market with cautious pricing for two beauty
companies’ listings. Although Galderma performed, Douglas’s debt
pile spooked investors. For sellers sitting on $3 trln of unsold
assets the message is clear: discounts work, but only for
healthy businesses.
    
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    CONTEXT NEWS
    Shares in skincare company Galderma rose 16% on March 22
after the maker of cosmetic fillers and medical creams made its
stock market debut in Switzerland.
    Galderma's shares started trading at 61 Swiss francs on the
SIX Swiss Exchange, up from the final price for its initial
public offering (IPO) of 53 Swiss francs per share.
    The opening price gave Galderma a market capitalisation of
14.5 billion Swiss francs ($16.1 billion).
    Proceeds from the IPO, which consisted mainly of new shares,
will be used to pay down debt.
    Private equity group EQT led a consortium that bought
Galderma from Nestlé for 10.2 billion Swiss francs in 2019.
    Meanwhile, beauty retailer Douglas priced its IPO, Germany's
largest since Schott Pharma's debut last September, at 26 euros
($28.38) per share on March 19. But by 0929 GMT on March 22 the
shares were trading 22.06 euros, a 15% discount to its IPO
price.
    Global private equity firms are sitting on $3.2 trillion of
unsold assets, according to a report from Bain & Company.

 (Editing by Lisa Jucca and Streisand Neto)
 ((For previous columns by the author, Reuters customers can
click on  DONNELLAN/ 
Aimee.Donnellan@thomsonreuters.com; Reuters Messaging:
Aimee.Donnellan.thomsonreuters.com@reuters.net))