EMEA IPO: Galderma's SFr2.3bn IPO
Spotless execution Swiss skincare specialist Galderma and its financial sponsor parent EQT revived the IPO playbook of old with its SFr2.3bn (US$2.5bn) listing that was one of the best performers in 2024.
After a moribund two years for listings, it was essential that private equity rebuilt sentiment and Galderma's long-awaited IPO in March was the answer. A planned IPO in 2022 never got going and in 2023 when the IPO was again delayed Galderma privately raised US$1bn to reduce leverage to a more attractive level for public markets.
Launched two days after CVC-owned German perfume retailer Douglas, Galderma cleaned up with top-of-the-range coverage within 30 minutes after a packed pre-marketing and double-digit coverage on top-end pricing. Ticket sizes were large enough that just five orders could have taken the SFr2bn base deal, with multiple times' coverage on long-money alone in a massive book of around 400 lines. The 10 largest orders took 40% and the top 20 60%, with more than two-thirds going to long-only money.
A compelling discount to peers of close to 25% and a wall of price-insensitive Swiss demand, combined with an asset that had been on investors’ radar for years, led to around 20% of orders being zeroed, forcing investors to buy in the aftermarket.
Douglas provided a stark contrast, with the German IPO pricing at the bottom and the two diverged on debut. Galderma was compared to Porsche as a must-have while Douglas was smaller and a less compelling story, and the Swiss company delivered by trading up 20.8% on debut and rising strongly thereafter.
A full greenshoe followed after just three days and lockups were happily waived in September and November for upsized SFr1.07bn and SFr1.28bn sales from the consortium of EQT, Abu Dhabi Investment Authority and Auba Investment. Pricing of the ABBs were SFr75 and SFr80, respectively, and still investors were turned away, forcing them to buy in the market.
As with the IPO, and perhaps crucially for the future, a number of participants were investors not typically seen in ECM trades.
A senior banker not involved in the deal said he has cited EQT and Galderma as an example to other private equity funds, saying they got the timing right, leverage right and most importantly didn't push on valuation, then did the same again with the blocks.
By year-end, Galderma shares had nearly doubled to more than SFr100, enabling further sales from a consortium still owning 54.5%.
The Galderma transaction is what should happen. In good years the IPO and selldowns wouldn't stand out, they are simply well-executed deals for a quality company. Yet in 2024 that is precisely why Galderma merits an award; in 2025, hopefully, it wouldn't.
To see the digital version of this report, please click here.
To purchase printed copies or a PDF of this report, please email leonie.welss@lseg.com