ConvaTec eyes $1.8B IPO on London exchange with former GSK chair at helm

ConvaTec, a medical products company that makes wound care dressings and colostomy bags, is looking to raise $1.8 billion in a public offering on the London Stock Exchange that could be London's largest this year.

The IPO is also seen as a test of investor confidence in the wake of Britain’s vote to leave the European Union, Reuters reported.

As part of the public offering, Sir Christopher Gent, former chairman of GlaxoSmithKline, would be named chairman of ConvaTec. Back in 2008, GSK agreed to sell its ConvaTec division to a private equity partnership for $4.1 billion.

In filing documents cited by several news agencies but not made available in the U.S., the company said it plans to use the proceeds from the public offering to pay down debt. It expects to be listed later this month or in early November.

The company said it expects about 25% of its shares will be freely tradable following the public launch, giving ConvaTec a market value of about $7.2 billion.

Paul Moraviec, the company’s CEO, forecast a growing market for ConvaTec’s products as the world’s population ages and experiences more prolonged chronic health conditions that will create “high levels of recurring revenues, with many chronic care patients using our products for life.”

Still, the IPO market remains uncertain with global equity deals down about 30% this year, according to Reuters. Britain's move to abandon the EU has only heightened the uncertainty swirling in the global economic outlook.