Medilines Distributors Incorporated, a leading distributor of medical equipment to public and private healthcare facilities, is planning an initial public offering worth up to P2 billion.

In a statement, the firm said it is preparing for an IPO that could take place before the end of the year, subject to regulatory approvals.

Based on its preliminary prospectus, Medilines is planning to offer up to 825 million shares consisting of 550 million primary shares and 275 million secondary shares to be offered by controlling shareholder Virgilio B. Villar.

Priced at up to P2.45 per share, 70 percent of the IPO shares will be allotted for institutional and overseas investors while the remaining 30 percent will comprise the domestic offering.

Net proceeds from the primary offer amounting to P1.35 billion will be used by the company to fund the initial working capital for its product portfolio expansion via the medical consumables segment and 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.”

Medilines recently appointed PNB Capital and Investment Corporation as the sole issue manger, lead underwriter and sole bookrunner for the company’s intended stock market debut.

“We are excited to work with Medilines in drawing out another opportunity to bring to the capital market an essential and pandemic-resilient business. We envision this to be the first pure-play healthcare IPO in the Philippines,” said PNB President Capital Gerry Valenciano.

A pure-play is a company that focuses on only one line of business, unlike a diversified company which has a wide-ranging product line and sources of revenue. Catering to a niche market, pure-plays have easy-to-understand cash flows and revenues.

Medilines is an essential distributor to public and private healthcare facilities across the Philippines of critical, best-in-class equipment from medical device companies such as Siemens, B. Braun and Varian.

Their portfolio of products under diagnostics imaging, dialysis, and cancer therapy addresses the medical treatment needs of Filipinos especially in the challenging times brought by the COVID-19 pandemic.