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Stada CEO Sees Strong Investor Demand Ahead of Top European IPO

Pharmaceutical production at Stada Arzneimittel AG. (Alex Kraus/Bloomberg)

(Bloomberg) -- German drugmaker Stada Arzneimittel AG could break open the market for European initial public offerings again as it gears up for what could be the region’s largest listing this year. 

The company saw “huge” interest during early educational meetings it held with about 60 investors, Stada Chief Executive Officer Peter Goldschmidt said in an interview Monday at the company’s headquarters in Bad Vilbel, on the outskirts of Frankfurt. Stada could list as soon as the post-Easter window in April, according to people with knowledge of the matter, though Goldschmidt declined to comment on a specific timeline. 

“We’re growing at a faster pace than most of our peers and have a very attractive financial profile,” Goldschmidt said. Listed peers like Switzerland’s Sandoz Group AG and Galderma Group AG, as well as the UK’s Haleon Plc, trade at more than 10 times their estimated Ebitda. 

That could indicate a valuation of more than €10 billion ($10.3 billion) for Stada based on its forecast profit, according to Bloomberg calculations. Goldschmidt said that Stada is on track to achieve €930 million to €990 million of earnings before special items in 2025, and and revenues of between €4.25 billion and €4.4 billion, after hitting its targets for the last year.

Stada sells generic drugs, consumer health products and specialty pharmaceuticals. The company plans to slash its debt pile by around €3 billion, from its current level of €5.6 billion, Goldschmidt said. That debt reduction will come from its private equity owners, Bain Capital and Cinven, as well as the issuance of new stock. Goldschmidt said that Bain and Cinven aren’t planning to provide a capital injection financed by a margin loan and collateralized by Stada stock.  

The planned Frankfurt share sale could raise around €1.5 billion, people familiar with the matter have said. That would rank as one of the biggest health-care transactions in Europe in recent years and cap a prolonged effort by Bain and Cinven to pursue a sale or listing of the business. Goldschmidt declined to comment on specific numbers.

Stada’s listing could provide a starting point for larger acquisitions, according to Goldschmidt. 

“We’ve set up Stada in a way that we believe will support further growth in the future,” he said.

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