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An Apotex facility in Toronto in 2021. The drug manufacturer has five out of its eight facilities in Canada and the majority of its workers are based in the country.Nathan Denette/The Canadian Press
Canada’s largest drug manufacturer, Apotex Health Corp., is planning a share issue and secondary stock sale totalling at least $1-billion, valuing the company at about $5-billion, according to new securities filings.
Apotex announced Monday it planned to sell up to 50 million shares at a price of $20 to $24 per common share. That’s about one-fifth of the company’s total 231 million issued and outstanding shares on a non-diluted basis.
If the IPO goes ahead, it will be the largest by value on the Toronto Stock Exchange since Definity Financial Corp. DFY-T went public in 2021 − and the largest ever in life sciences.
About two-thirds of Apotex’s 6,500 global employees are based in Canada, as are five of the company’s eight manufacturing facilities.
About one-fifth of all generic drugs taken in Canada are manufactured by Apotex, the company said. The drug maker’s generic version of the blockbuster drug Ozempic was the first to widely hit pharmacy shelves last week and Apotex already has tentative approval for the product from the U.S. Food and Drug Administration, although the main patent for Ozempic doesn’t expire in the U.S. until 2032.
Apotex was founded in 1974 by entrepreneur Barry Sherman. He and his wife Honey were killed in 2017 and his family sold a majority stake to U.S. private equity firm SK Capital Partners LP five years later.
SK Capital Partners and the Sherman family (through API Investment LP) will retain significant ownership of Apotex even after the IPO. Securities filings indicate SK Capital Partners will own at least 57.1 per cent of all shares and API Investment will own 14 per cent.
The company aims to raise about $850-million through a treasury offering. Existing shareholders plan to sell about $150-million from a secondary offering.
Those other shareholders include the Fonds de solidarité FTQ labour fund, Jacesa Investments Ltd., Arlington Capital Holdings Inc., Juno Pharmaceuticals LP and Datalo Inc.
Apotex said in filings it plans to use the proceeds of the treasury offering to pay down debt. Long-term debt stood at $2.9-billion as of March 31, according to the amended prospectus.
The company said it earned $373.8-million in net income on $3.49-billion of revenue in the year ending March 31.
Apotex also said the pricing is expected during the week of June 8 and closing is expected the week after.
The offering is co-led by underwriters RBC Capital Markets, TD Securities and Bank of Nova Scotia, and the joint bookrunners are BMO Capital Markets and Jefferies Securities. Goodmans LLP is Canadian lead counsel.
