The Securities and Exchange Commission (SEC), in its pre-effective letter dated October 12, 2021 and The Philippine Stock Exchange, Inc. (PSE), in its notice of approval dated October 18, 2021, approved the planned initial public offering (IPO) of leading medical equipment distributor Medilines Distributors Incorporated (Medilines), subject to compliance with certain conditions.

Medilines will be listed under the trading symbol “MEDIC” upon the conclusion of the country’s first pure-play healthcare IPO.

“We are now one step closer to our vision of providing the public an investment opportunity that is set to rapidly grow amidst the COVID-19 pandemic and beyond as everyone realizes the importance of the healthcare industry” said Virgilio B. Villar, Chairman of Medilines.

Based on a preliminary prospectus dated October 8, 2021, Medilines will be offering up to 550 million primary common shares and 275 million secondary shares at an offer price of up to P2.45 per share.

The net proceeds from the IPO is expected to amount to roughly P1.28 billion, which it will use to fund the company’s working capital for its existing products, expand into the medical consumables segment, and to repay debt.

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.

During the pandemic, Medilines provided some of the necessary medical equipment to boost the country’s response to COVID-19 through diagnostic imaging devices such as CT scans and x-rays, which are critical in allowing doctors to determine the extent of COVID-19 infection in patients.

Medilines’ revenues for the first semester of 2021 jumped to P815 million which is higher by 281% year-on-year. Net income during the same period in 2021 was at P100 million which is equivalent to almost 100% of the net income posted for full-year 2020. The Company attributes the profitability growth to the increase in sales of cancer therapy machines during the first semester of 2021.

Medilines intends to finalize its offer price on November 16, 2021. The target offer period for the IPO will be from November 22 to November 26, 2021 while the target IPO listing date is on December 7, 2021.

“We look forward to offering to investors this trailblazing deal that will allow them to partake in the country’s growing healthcare industry”, commented Gerry Valenciano, President and CEO of PNB Capital and Investment Corporation (PNB Capital).
 

PNB Research expects the Philippine Stock Exchange index (PSEi) to finish at 7,490 to 8,100 this year on expectation that the relatively low yield environment will allow earnings multiples to remain elevated. This suggests a potential upside of up to 10.8% from Thursday’s close of 7,311.72