Stada - Solid investor demand ahead of IPO

German drugmaker Stada Arzneimittel AG is preparing for what could be Europe's largest initial public offering (IPO) this year, Bloomberg reports.

The company has seen "huge" interest during meetings with about 60 investors, Stada Chief Executive Peter Goldschmidt said in an interview with Bloomberg last week.

Stada could list in April, after Easter, according to people familiar with the matter. Goldschmidt declined to comment on a specific listing timeline.

"We are growing faster than most of our peers in the industry and have a very attractive financial profile," Goldschmidt said.

Listed companies such as Sandoz Group AG of Switzerland and Galderma Group AG, as well as Haleon Plc of the United Kingdom, are trading at more than 10 times their estimated EBITDA. That could indicate a valuation of more than 10 billion euros ($10.3 billion) for Stada based on projected profit, according to Bloomberg calculations.

Goldschmidt said Stada is on track to generate revenue of 930 million to 990 million euros before special items in 2025 and revenue of 4.25 billion to 4.4 billion euros, after meeting its targets for the previous year.

Stada sells generic drugs, consumer health products and specialty pharmaceuticals. The company plans to reduce its debt by about 3 billion euros, from its current level of 5.6 billion euros, Goldschmidt said. The debt reduction will come from its owners Bain Capital and Cinven, as well as by issuing new shares. Goldschmidt said Bain and Cinven do not plan to provide a capital injection financed by a margin loan and secured by Stada shares.

The planned sale of shares on the Frankfurt Stock Exchange could raise around 1.5 billion euros, according to people familiar with the matter. It would be one of the largest healthcare deals in Europe in recent years and would end a protracted effort by private equity firms Bain and Cinven to sell or list the business. Goldschmidt declined to give figures for the IPO.

The Stada listing could provide a springboard for larger acquisitions, according to Goldschmidt, who concluded: "We have built Stada in a way that we believe will support further growth in the future."

Experts say the Stada listing could be a catalyst for a revival in the European IPO market.