PSE approves Medilines' P2-B maiden stock offering

Published October 21, 2021, 4:13 PM

by James A. Loyola

The Philippine Stock Exchange Board of Directors has approved the listing of the shares of Medilines Distributors Inc. (MEDIC), paving the way for its planned P2 billion initial public offering (IPO).

For its maiden offering, MEDIC will be selling up to 825 million primary and secondary shares from November 22 to 26, 2021 at a price of up to P2.45 per share. The IPO consists of up to 550 million primary common shares plus a secondary offering comprised of up to 275 million shares to be sold by selling shareholder, Virgilio B. Villar.

The final offer price will be determined on November 16, 2021 after the company conducts its book building process.

“The healthcare industry has been in the spotlight since this pandemic broke out. We are pleased to see a company in this space tap the stock market for capital raising,” said PSE President and CEO Ramon S. Monzon.

He added that, “We are hopeful that this IPO will pave the way for other companies in this sector to seek funding from the equities market.” Proceeds from the IPO will be used by MEDIC to procure existing products and build-up its medical consumables inventory and for debt repayment.

“We intend to utilize P541.5 million as initial working capital to expand our product portfolio to include medical consumables which are low-cost yet high- margin products that are regularly used by our customers to operate the high- value medical equipment that we sell,” Medilines said in its prospectus.

It added that, “We intend to use the P743.1 million to retire debt which were used primarily uses to fund our working capital requirements. We believe that pursuing this strategy will increase the overall shareholder value of the Company as this will decrease our financing cost.”

Ten percent of MEDIC’s firm offer shares will be reserved for local small investors (LSIs), who may subscribe to the IPO through the PSE EASy website or mobile application.

Medilines is a leading distributor of medical equipment in the country and has established its strong and strategic partnerships with top global suppliers Siemens Healthineers, B. Braun Avitum Philippines, and Varian Medical Systems.

The firm said these partnerships allow Medilines to deliver state-of-the-art equipment to various health facilities in the country. It is focused on three healthcare categories: diagnostic imaging, dialysis, and cancer therapy.

According to Medilines Chairman Virgilio B. Villar, the company’s working relationship with the three global companies, has been tested by time.

“Our long-standing relationships with these global industry leaders will continue to strengthen our market position in the medical equipment distribution space in the Philippines,” he added.

“The established operations of our principals in the Philippines also enable our company’s operations to be lean and efficient,” Villar said.