Synlab to price IPO at low end of range, cuts offer size

Econo Trade (India)

26/04/2021 08:37

FRANKFURT, April 26 (Reuters) - Laboratory services group
Synlab on Monday guided investors to expect its planned initial
public offering to price at the bottom of the marketing range,
cutting the offer size by a quarter due to sluggish demand.
    The company is now offering new shares worth 400 million
euros ($484 million) plus existing shares worth 271 million
euros at 18 euros apiece, excluding an overallotment option, the
bookrunners organising the deal said. 
    That is down from an original base deal size of 895 million
to 1.03 billion euros. The deal will give Synlab, which had
offered its shares in a range of 18 euros to 23 euros, a market
capitalisation of 4 billion euros. Its free float will stand at
17%. 
    Existing shareholders including Cinven, Novo Holdings and
the Ontario Teachers' Pension Plan Board decided to cut their
shares on offer, having hoped for a higher valuation and to
ensure a good market performance after the listing, one of the
bookrunners said. 
    Investors had questioned the sustainability of earnings,
which had spiked 71% to 679 million euros in 2020 on the back of
strong demand for Synlab's COVID-19 testing capacities.
    According to Fitch, about a fifth of Synlab's sales are
COVID-19 related, a positive factor that the ratings agency
expects will still be relevant until 2023, albeit likely on a
smaller scale.
    Synlab is forecasting sales to exceed 3 billion euros in
2021, compared to 2.6 billion in 2020. It projects 10% annual
revenue growth over the longer term, of which 3% will be organic
with the rest driven by acquisitions.
    Books for Synlab's IPO close on Tuesday with the first
trading day slated for April 30.
    ($1 = 0.8264 euros)

 (Reporting by Arno Schuetze, editing by Louise Heavens)
 ((arno.schuetze@thomsonreuters.com; +49 30220133648;))