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Private equity group EQT is reviving plans for an initial public offering of dermatology company Galderma as investors hope Europe’s market for new listings may finally be reopening.
Galderma, spun out of Nestlé in 2019, is preparing for an IPO in Switzerland that could come as soon as the first half of this year, said people familiar with the matter. Bankers have said the unit could be valued at roughly $20bn.
The people cautioned that the deal’s timing and size had not been finalised and were subject to change. EQT declined to comment.
A listing for Galderma would mark one of the biggest European IPOs in recent years, and come after performance last year slumped to the lowest level since the 2008 financial crisis.
The company’s growth has been driven by specialist skincare products such as Cetaphil, brands that treat issues including acne, rosacea and sensitive skin. It has also had success with so-called “injectible aesthetics”, products like botox and filler.
Last year Galderma received approval from the US Food and Drug Administration for two new injectibles — one that targets cheeks, the other “under-eye hollows”. The company has set out to develop the largest injectibles business in the market, taking on competitors such as AbbVie and Merz.
It reported record net sales of $3bn in the first nine months of 2023, according to its latest results, a rise of about 9 per cent on the same period in 2022 when currency fluctuations are eliminated.
Stockholm-based EQT has previously looked at listing Galderma, but private equity groups have had a challenging time selling their portfolio companies on public markets as interest rates have risen and post-IPO performance has been patchy. This issue has been particularly acute with large assets such as Galderma, which are too big to sell to their buyout peers.
Last June, Galderma raised about $1bn in a private placement from existing and new shareholders to strengthen its balance sheet and fund expansion.
While EQT had previously targeted raising up to €3bn in an IPO, the private placement helped lower Galderma’s borrowing levels and may allow the company to target a smaller offering this time, the people said.
Private equity executives are expecting more activity in 2024, as investors in buyout funds have begun increasing pressure on the groups to sell long-held investments and start returning cash.
Other private equity-owned companies that could list in Europe this year include Italian luxury sports shoe brand Golden Goose, owned by Permira.
Consumer goods giant Nestlé sold Galderma for $10bn five years ago to an EQT-led consortium that included Singapore’s GIC and the Abu Dhabi Investment Authority.
The company accelerated its IPO planning after the Covid-19 pandemic helped turbocharge the market for so-called “tweakments” like fillers and botox.
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