PE-backed diagnostics firm Synlab announces IPO pricing

The final offer is to be determined through a bookbuilding process, the company said in a statement.

The company will have a market capitalisation of €4-5bn based on this pricing, with an enterprise value of €5.9-6.9bn, according to the same statement.

Founded in 1998, Munich-headquartered Synlab has a network of 450 laboratories and 1,600 blood collection points in 36 countries. The company posted revenues of more than €2.6bn, EBITDA of €679m and operating profit of €504m in 2020. Synlab expects to reach revenues of more than €3bn in 2021.

Cinven acquired Synlab in a €1.8bn SBO from BC Partners in 2015. OTPP acquired a minority stake in Synlab later that year. Novo took a 10% stake in the business in December 2016, increasing its stake by 20% through the purchase of new shares worth €250m in April 2017.

Synlab announced its IPO intention earlier in April 2021, as reported. The IPO is expected to take place later in Q2 2021.

The IPO is to comprise up to 22.2 million newly issued ordinary bearer shares from a capital increase, plus 27.5 million ordinary bearer shares from the pre-IPO shareholders.

Cinven, Novo and OTPP also have the option to place up to 12.4 million ordinary bearer shares as an upsize option, which will be subject to market demand. The sponsors will also grant a greenshoe option over 9.3 million ordinary bearer shares.

The IPO aims to raise around €400m in gross proceeds from the sale of the newly created shares, with the aim of repaying parts of its outstanding debt.

If the greenshoe option is fully exercised, but excluding the upsize option, the IPO size will range from €1.03-1.19bn, according to the same statement. Including both options, the total IPO size will be €1.29-1.48bn.

Holding company Synlab AG has been created as a holding company for Synlab Group as part of the change in its legal form to a German stock corporation; its existing shareholders are to transfer their shareholding from Synlab Ltd to Synlab AG.

A new 12-person supervisory board has also been formed. Members will include Synlab founder Bartl Wimmer, as well as Cinven partner Peter Catterall, Cinven principal Anastasya Molodykh, and Christian Salling, senior partner at Novo.

Goldman Sachs and JP Morgan are joint global coordinators and joint bookrunners. BofA Securities, Deutsche Bank, Barclays, BNP Paribas, HSBC, Jefferies and UniCredit are joint bookrunners, while Crédit Agricole and Natixis are co-lead managers. Lilja & Co has been mandated as independent adviser to Synlab.

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