Sector News

Novo Nordisk joins pharma’s IPO clique with plans for tech subsidiary spinoff

February 10, 2015
Life sciences
It’s official: Novo Nordisk has joined the spinoff club. The Danish drugmaker says it’s ready to let its information technology unit, NNIT, go solo via an initial public offering.
 
Few details are available at the moment; Novo Nordisk announced the decision in a bare-bones press release. The company says it will take place in 4-5 weeks, but won’t say how big the offering might be. What’s certain is that it’s another example of a drugmaker sharpening its focus by hiving off subsidiaries and business units.
 
Novo has been weighing the prospect since last January, when the company named a new CFO for NNIT, Carsten Krogsgaard Thomsen, and charged him with reviewing a spinoff. In March, Novo hired Morgan Stanley and Danske Bank to advise on the potential offering. The questions were the usual ones: Could hiving off NNIT “create value”? Would NNIT be better off on its own?
 
Independence might make it easier for NNIT to compete for clients. NNIT brought in about 2.2 billion kroner in 2013, or about $404 million, and external customers have accounted for an increasing share of those sales. For 2014, that share was expected to be about 50%. That’s one reason why Novo was looking at a stock offering, Thomsen said last year.
 
“An IPO will provide the company with improved access to the capital markets and stronger brand recognition, among other benefits,” NNIT said in a separate press release (as quoted by Reuters).
 
The IT unit has been edging its way toward solo status for years. Novo Nordisk formally set NNIT aside in an independent, wholly owned subsidiary back in 1998. Last year’s sales amounted to 2.4 billion kroner.
 
Novo’s is the second spinoff announcement so far this year. Last week, GlaxoSmithKline said it was moving toward an IPO for its HIV joint venture, ViiV Healthcare, and would decide for certain by midyear. That would be a much bigger deal; with its £1.5 billion in 2014 sales, analysts see ViiV valued at £12 billion to £18 billion ($18 billion to $27 billion). 
 
By Tracy Staton
 

comments closed

Related News

March 24, 2024

Johnson Matthey to sell its Medical Devices business for $700 million

Life sciences

Johnson Matthey Plc (JM; London) announced that it has signed a definitive agreement to sell 100% of its Medical Device Components business (MDC) to Montagu Private Equity (Montagu) for cash consideration of US$700 million (£550 million) on a cash free debt free basis.

March 24, 2024

Lonza acquires biologics manufacturing plant in California from Roche

Life sciences

Lonza AG (Basel, Switzerland) announced it has signed an agreement to acquire the Genentech large-scale biologics manufacturing site in Vacaville, Calif. from Roche (Basel, Switzerland) for $1.2 billion. The acquisition will significantly increase Lonza’s large-scale biologics manufacturing capacity.

March 24, 2024

Roquette to acquire IFF Pharma Solutions to boost global excipient presence

Life sciences

Roquette plans to acquire International Flavors & Fragrances (IFF) Pharma Solutions for an enterprise value of up to €2.85 billion (US$3.09 billion). With the acquisition set to close in the first half of 2025, the plant-based ingredient and pharmaceutical excipients supplier aims to reinforce its position in the pharmaceutical industry.

How can we help you?

We're easy to reach