PE-backed Synlab announces IPO intention

The company will list on the regulated market (prime standard) segment of the stock exchange, according to a statement.

While Cinven holds a majority stake in the company, Novo Holdings and Ontario Teachers' Pension Plan (OTPP) also hold stakes in Synlab.

The IPO is expected to take place in Q2 2021, according to a statement.

Synlab expects to raise €400m in proceeds from the IPO, which will be used to repay part of its debt obligations.

The offering will comprise newly created shares from a capital increase, as well as a secondary component from Synlab's existing shareholders, the company said in a statement.

Goldman Sachs and JP Morgan are acting as joint global coordinators and joint bookrunners. Bank of America Securities, Deutsche Bank, Barclays, BNP Paribas, HSBC, Jefferies and UniCredit are joint bookrunners. Crédit Agricole and Natixis are acting as co-lead managers, while Lilja & Co is advising Synlab and its shareholders.

Synlab first announced in February 2021 that it was considering strategic options as parts of its further growth strategy. Reuters reported in the same month that the IPO could value the company at $7.3bn.

Headquartered in Munich, Synlab was founded in 1998 and has a network of 450 laboratories and 1,600 blood collection points across 36 countries. It generated 2020 revenues of more than €2.6bn, EBITDA of €679m and operating profit of €504m. Synlab expects to reach revenues of more than €3bn in 2021, the company said in a statement.

Cinven merged Synlab with France-based Labco after it acquired the business in an SBO from BC Partners in 2015. The company saw significant growth in 2020 due to the significant demand for Covid-19 testing, Synlab said in a statement.

The company has had private equity backing for more than 10 years. BC Partners acquired a 40% stake in Synlab in January 2010, following which the company acquired Centro Diagnostico Specialistico San Nicolo and Fleming Labs.

Cinven acquired a majority stake in Synlab in June 2015, combining the company with Labco. The deal valued Synlab at €1.8bn and generated returns of 2.7x money for BC Partners. At the time, Synlab employed 700 staff and had 300 laboratories across 26 countries, posting 2014 revenues of €765m. Cinven deployed equity via its Fifth Cinven Fund, which held a final close in June 2013 on €5.3bn.

OTTP acquired a minority stake in Synlab in October 2015.

Novo Holdings acquired a 10% stake in Synlab in December 2016, increasing its stake by 20% in April 2017 through the purchase of new shares worth €250m.

The company said in a statement issued at the time of Cinven's investment that it had made 52 acquisitions between 2011 and 2015. Since then, the company has continued to expand via acquisitions, making 34 further add-ons in 2016.

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