Novo Nordisk ($NVO) has set the terms for the IPO of its IT services unit NNIT. If NNIT prices at the top end of its range when it goes public in the next week or so, the listing could generate up to $335 million for Novo Nordisk.
Hitting these highs would value NNIT at around $450 million, the bottom end of the range discussed by analysts over the past year. Figures as high as $1.2 billion were bandied about when the IPO was first proposed and $600 million was suggested when NNIT was reportedly weeks away from listing late last year. Market conditions scuttled those plans and pushed the IPO back. The listing now looks nailed on to take place by March 6 but at a lower price than expected.
"We had assessed that [the price] might land in a higher range, but they've gone with a precautionary consideration. Because this is a specialized company, the growth potential is stable, but also a bit limited," Alm. Brand Markets analyst Michael Friis Jørgensen told Reuters. If the listing comes in at the bottom end of the range, it would be worth around $259 million to Novo Nordisk. The collapse of the Danish IPO market in the wake of the OW Bunker scandal means there are no recent precedents.
Novo Nordisk has nonetheless decided it is still worth rolling the dice and seeing whether investors are interested in an IT services stock. The listing will cut Novo Nordisk's stake in NNIT to between 25.5% and 31.5%. Novo Nordisk's majority shareholder Novo A/S has committed to buying a 25.5% stake, meaning NNIT will remain closely tied to the Danish drugmaker even after the IPO. NNIT generated almost half of its sales last year from clients other than Novo Nordisk.
- here's Reuters' article