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Thursday, December 2, 2021

Gao Demei negotiates a potential US$22 billion initial public offering




Swiss skincare expert Galderma has begun negotiations with international investors on a possible US$22 billion initial public offering in the first half of next year.

CEO Flemming Ornskov, the former boss of rare disease expert Shire, told the Financial Times that Galderma and its owners have accelerated their strategy after two years of strong growth Planning, partly because of the Covid-19 pandemic.

Galderma was spun off from Nestlé in 2019 and acquired by a consortium led by private equity firm EQT for $10 billion, including Singapore’s GIC and Abu Dhabi Investment Authority.

Ornskov said that since then, the growth of the market in which Galderma operates has “significantly accelerated.” “We have experienced double-digit top-line and bottom-line growth. Last year, our revenue reached $3 billion. We expect to increase by $3.5 billion this year.”

Ornskov said that this epidemic, coupled with the growing power of social media, has promoted the development of non-invasive beauty and professional skin care markets.

“Digitalization and social media emphasize something that has always been a part of it [business] -The emotional part. The skin is the largest organ of the human body, and we observe it every day. We reacted to this. We observe people and their skin, and then judge whether they are healthy or happy. .. The many hours spent on the screen reinforce this. “

Fleming Ornskov call
Flemming Ornskov: “I think our owners are getting second opinions on market attractiveness and how we accumulate from very capable people, including investors.” © Jason Alden/Bloomberg

Ornskov said that he could not comment on the timing or results of the company’s strategic discussions, but confirmed that the bank has been appointed and said that a decision will be made on the future of Gao Demei.

He added that “growth profile, company size” means that IPO “is certainly one of many listed companies [options] But it must be a reality.”

According to the company’s senior advisers, Lazard has been appointed as the chief IPO adviser, with Goldman Sachs, Morgan Stanley and Credit Suisse as joint global coordinators. Bank of America, BNP Paribas, Citi, Jefferies and UBS are joint bookrunners. The bank told the group that the valuation could reach US$22 billion.

“I think our owners are getting second opinions on market attractiveness and how we accumulate from very capable people, including investors,” Ornskov said. “I think we will do a good job on the scorecard, because if I look at our growth and market performance, we are ready to one day become the world’s leading dermatology company.”

Despite this, Gao Demei still relies heavily on a series of historical products-many of which have begun to expire. Stagnant profits and scarce new product channels are the key reasons for Nestlé’s decision to sell the business.

Ornskov’s appointment is an early signal that his new owner expects a radical change.

The 63-year-old Danish has pledged to invest a lot of money in research and development, and to reposition Gao Demei’s existing product line by honing the company’s marketing focus-which he said still has great value.

Ornskov said that for brands including Cetaphil and Proactiv, “the vast majority” of advertising revenue is now spent online and on social media. “This is not a skill set for 2019.”

Although investors criticized its “excessive” compensation package, Ornskov established a reputation for maximizing shareholder value in Shire-using strict control over product mix and marketing to guide FTSE 100 index companies In the end, it was acquired by Takeda of Japan for 63 billion U.S. dollars.

The owner of Galderma-and Ornskov himself-believes he can repeat the same mistakes.

Quoting his “track record” in Shire, he said: “I want to build the world’s leading dermatology company. I want to be a company known for its broadest product portfolio, best products, and most innovative products. ——So consumers, patients or dermatologists will always use us as a reference.”




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