Medilines Distributors Incorporated, one of the leading distributors of quality medical equipment in the Philippines, has priced its initial public offering (IPO) at P2.30 per share or slightly lower than the maximum pricing guidance of P2.45 apiece.
“We wanted to leave more upside on the table for our new shareholders who would get to directly participate for the first time in the continuous growth of the healthcare industry in the Philippines,” said Medilines Chairman Virgilio B. Villar.
Medilines will be offering up to 550 million primary common shares and up to 275 million secondary shares for an offering size of P1.9 billion based on the lower offering price.
Market sources said the institutional portion of the offering is 2.7 times oversubscribed with a number of “long-only” institutional investors subscribing to the IPO shares.
“The move is expected to further strengthen the interest in the country’s first pure-play healthcare IPO, ” said Gerry B. Valenciano, President and CEO of PNB Capital and Investment Corp., the sole issue manager for the offering.
The target offer period for the IPO will be from November 22 to 26. Target listing date on The Philippine Stock Exchange is on December 7 under the ticker MEDIC.
Retail investors will be able to buy the IPO shares online via PSE Electronic Allocation System (PSE EASy) during the offer period. The minimum subscription will be P2,300 and a maximum of P98,900.
Part of the proceeds from the IPO will be directly used by Medilines for its foray into the high-growth, high-margin medical consumables business to support the growing industry.
“We hope to attract long-term shareholders that share our vision in providing quality healthcare to every Filipino”, Villar added.
Founded in 2002, Medilines maintains a portfolio of best-in-class equipment from multinational brands such as Siemens Healthineers (Germany) for diagnostic imaging, B. Braun (Germany) for dialysis, and Varian (USA) for cancer therapy.
The company plans to expand their presence and their product portfolio in the near future to help enhance the country’s healthcare system through quality medical devices.
Sales from 2018 to 2020 jumped from P1.17 billion to P1.47 billion which translates to a compounded annual growth rate (CAGR) of 11.9 percent.
Net profit during the same period grew from P77 million to P103 million or at a CAGR of 16 percent. For the first half of 2021, Medilines net income was at P100 million owing to the resilient demand for its medical products.
Based on a recent independent study by Ken Research, in terms of expenditure, the healthcare industry rose from P489.1 billion in 2014 to P911.4 billion in 2020 (or a CAGR of 10.9 percent).
Healthcare expenditure is expected to grow further at a CAGR of 11.2 percent to reach P1.5 trillion by 2025, driven by a growing and aging population, growing incidences of diseases such as cancer and pneumonia, as well as increased efforts by the government to expand and modernize the country’s healthcare facilities.