Catalent shoots for $872M in a blockbuster IPO

Pharma contracting giant Catalent has jumbo-sized its Wall Street ambitions, filing to go public in an IPO that would bring in about $872 million at its midpoint.

In an amended regulatory filing, the New Jersey company spelled out its plans to offer 42.5 million shares at between $19 and $22 each. Setting aside another 6.4 million shares to cover overallotments, Catalent is in line to gross as much as $1.1 billion in the transaction.

If Catalent's plans come through, it would trade under "CTLT" and become just the second outsourcing shop to go public since the the beginning of the recent boom in life sciences IPOs. Quintiles ($Q), the sector's largest company, pulled off a $947 million debut last year, and its shares have risen about 10% ever since.

Catalent, which private equity firm Blackstone bought from Cardinal Health for $3.3 billion in 2007, has its hand in nearly every segment of the global pharmaceutical industry. In the fiscal year ended last June, the company did business with 85 of the top 100 branded drugmakers, 20 of the top 25 generics outfits and 41 of the 50 biggest producers of biologics, according to its filing. Its major clients include Johnson & Johnson ($JNJ), Roche ($RHHBY), Pfizer ($PFE) and GlaxoSmithKline ($GSK).

The company raked in about $1.8 billion in revenue in fiscal 2013, a roughly 6% jump over the previous year. Catalent reported a $46.8 million loss in the same period, as it spent big to expand its global reach and watched cost of sales alone claim about 68% of its revenue.

The New Jersey-headquartered contractor gets about 66% of its revenue from its oral drug formulation business last year, but Catalent has been working to expand its development and clinical services segment. That business grew 51% to $404.8 million in fiscal 2013, growth the company credits to its $410 million acquisition of Aptuit's trial supply segment.

Catalent said it plans to spend its IPO raise on outstanding debts and general corporate purposes. The company employs about 8,500 people around the world, according to its filing.

- read the filing

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