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| Labco CEO Philippe Charrier |
French medical diagnostics outfit Labco is planning to launch a €545 million ($598 million) initial public offering, weeks after the company unveiled its IPO ambitions to reduce debt and generate cash for new acquisitions.
The Paris-based company will list on Euronext Paris and set a price range of between €7 and €9, offering up to 9,428,104 shares if a 15% overallotment option is fully used. Labco plans to close its offer on May 11, with pricing on May 12 and trading commencing the following day, the company said in a statement.
An IPO comes at a pivotal moment for Labco, as it looks to cut its losses and expand its footprint in the field. Cash generated from a public offering will increase the company's financial flexibility, allowing it to "deploy a strategy of growth through acquisitions" and "seize new growth opportunities," Labco said in a statement. The company also plans to use funds raised through an IPO to partner with public organizations outsourcing their medical diagnostic services and build out its operations.
"With more than 160 laboratories in 7 countries and over 160 acquisitions completed since its founding in 2003, Labco enjoys strong positions, enabling it to benefit from the growth potential of the international medical diagnostics market," CEO Philippe Charrier said in a statement. "We aim to become the major pan-European operator, with our medical project and our quality commitment at the heart of our strategic focus. In addition to providing greater financial flexibility, the upcoming listing will raise our profile."
And Labco has a promising track record, raking in €650 million in sales in 2014 and an EBITDA of close to €131 million--a margin of about 20.2%. The market for medical diagnostics is still in flux, as key industry players respond to pricing pressure, fluctuating quality standards and increasing test complexity. But Labco is "actively involved" in the consolidation and plans to use its diagnostic smarts to cash in on the market, the company said when it announced its plans to go public earlier this month.
Meanwhile, other med tech companies continue to ride the IPO chariot to generate some upward momentum. Earlier this month, Gelesis filed for a $60 million IPO after raising $22 million for its smart pill for obesity. Belgian molecular diagnostics outfit Biocartis jumped on the bandwagon this week, launching a €100 million ($109 million) public offering at the high end of its expected range as it diversifies its portfolio and develops new tests for infectious diseases and cancer.