Zentiva, the Central and Eastern European pharmaceutical company backed by Warburg Pincus, is hoping to raise $100m through a flotation on the Prague Stock Exchange. Reports suggest the IPO could see the company valued at around $900m in what will be the first IPO in the Czech Republic since 1993. The global offering is being lead managed by Merrill Lynch, while in the Czech Republic Wood & Company is handling it.
Global Depositary Receipts (GDRs) are being simultaneously offered on the London Stock Exchange. The shares and GDRs are being offered only to certain institutional investors in the US and elsewhere outside the Czech Republic.
Warburg owns 70% of Zentiva and is intending to sell up to $100m of shares in a secondary offering. It is expected to retain over half of the shares in the company following the flotation.
Zentiva intends to use the money raised to expand the business through acquisitions and repay the loan from ING Bank, Citibank, Komercni Banka and Ceska Sporitelna required to purchase Slovakian pharma manufacturer Slovakofarama.
Zentiva is one of the top pharmaceutical producers in Central Europe and is the result of a merger between previously Czech state-owned Leciva and Slovakofarama. Leciva was privatised in 1998 and Warburg Pincus backed a management buyout in May that year in which it took a majority interest. In August 2003 the company merged with Slovakofarama and began operating under the name Zentiva.
In 2003 it made a $79m operating profit. It has approximately a 16% value share and 40% volume share of the Czech and Slovak markets. Its business is comprised of 73% branded generics, 10% in-licensed pharmaceuticals, 13% over-the-counter pharmaceuticals and 4% active pharmaceutical ingredients.