Apotex Plans IPO That Could Value Generic Drug Maker at $5 Billion

Apotex Health Corp., Canada’s largest drug manufacturer, plans to raise at least $1-billion through a share offering and secondary stock sale that would value the company at about $5-billion, according to new securities filings. The proposed initial public offering would make Apotex the biggest on the Toronto Stock Exchange by value since Definity Financial Corp. went public in 2021, and the largest ever in Canada’s life sciences sector.

The company said it intends to sell up to 50 million common shares at a price range of $20 to $24 each. That represents roughly one-fifth of its 231 million issued and outstanding shares on a non-diluted basis. About $850-million of the proceeds would come from a treasury offering, with the remaining $150-million expected from existing shareholders selling shares. Apotex said it plans to use the money raised from the treasury offering to reduce debt.

Apotex has a major footprint in Canada, where about two-thirds of its 6,500 global employees are based and five of its eight manufacturing facilities are located. The company said it supplies about one-fifth of all generic drugs used in Canada. It also recently launched the generic version of Ozempic in Canada, becoming the first to bring the product widely to pharmacy shelves last week. In the United States, Apotex already has tentative approval from the Food and Drug Administration for the product, although the main Ozempic patent there does not expire until 2032.

Founded in 1974 by entrepreneur Barry Sherman, Apotex was later reshaped by tragedy and ownership changes after Barry Sherman and his wife, Honey, were killed in 2017. Five years later, the Sherman family sold a majority stake in the company to U.S. private equity firm SK Capital Partners LP. Even after the planned IPO, SK Capital Partners and API Investment LP, the Sherman family’s holding vehicle, are expected to retain significant control. Securities filings indicate SK Capital Partners will own at least 57.1 per cent of the shares, while API Investment will hold 14 per cent.

The company’s filings show long-term debt of $2.9-billion as of March 31. For the fiscal year ending that date, Apotex reported net income of $373.8-million on revenue of $3.49-billion. Pricing for the offering is expected during the week of June 8, with closing anticipated the following week.

The transaction is being co-led by RBC Capital Markets, TD Securities and Bank of Nova Scotia, with BMO Capital Markets and Jefferies Securities serving as joint bookrunners. Goodmans LLP is acting as Canadian lead counsel.