Nordic private equity house EQT, Abu Dhabi Investment Authority and Auba Investment secured SFr2.6bn (US$3.27bn) from their latest sale in Galderma to date, taking proceeds since listing the Swiss skincare specialist to SFr12.54bn – and they still hold shares worth another SFr7.6bn.

The sixth ABB by the trio is the largest and first to exceed proceeds from the SFr2.3bn IPO in March 2024. The three also sold 10% of the company to L’Oreal for an undisclosed amount in August 2024.

Wall-crossing on Monday completed with the deal multiple times covered on indications, leading to the offer of 20m shares representing 8.4% of Galderma. A formal covered message followed inside 10 minutes.

At 6:30pm, there was messaging that orders below SFr130 per share risked missing out, with books multiple times covered both at that level and above.

Pricing at SFr130 is a 6.9% discount to Monday’s SFr139.70 close.

A banker on the trade said that the sale had been well anticipated, unsurprising as it is the sixth sale in 13 months, and came just as the 90-day lock-up from an end of July trade was due to expire on Tuesday and followed strong results published in the previous week. There had been significant reverse enquiry both before and after the results, where Galderma raised its full-year guidance after 21% sales growth at constant currency in the third quarter.

There is still new money coming into the stock, with US demand continuing to grow, and a large fan base of investors that have supported the stock since IPO. Demand was largest out of North America for this trade, ahead of Swiss and UK money.

The top 25 accounts took approximately 60% of the deal from a book of around 250 lines. The long-only/hedge fund split was 50/50, despite the larger deal size, with several bankers highlighting the strength of long-only participation. Allocations were skewed to long-only, wall-crossed accounts and shareholders.

The number of days trading was around 18 on the composite and around 55 days on the local line, said a second banker, adding that an investor spoken to said that “if anyone could do this, it’s Galderma”. 

He said that the expectation had been closer to the 17m shares sold on the previous deal but there was zero pushback from investors on the 20m share sizing – order sizes simply got larger, including at least one US$1bn order. There was also enough demand to have pushed for a higher price, he said, but there was a desire from all involved to be disciplined and maintain aftermarket momentum.

The three vendors only sold a tiny number of shares in the base deal of the IPO and all of the secondary greenshoe. 

Pricing of SFr130 is the highest on an ABB to date and the discount is slightly wider than the tightest discount of 6.8% on the sale in May.

Galderma shares were up nearly 39% year-to-date as of Monday's close and continued to rise on Tuesday to SFr142.40 by late afternoon. A third banker involved said the sale released an overhang.

Bank of America, Citigroup, Goldman Sachs, Jefferies, Morgan Stanley and UBS were joint bookrunners. Goldman Sachs, Morgan Stanley and UBS were joint global coordinators on the IPO and have been present on all of the ABBs. 

Source: IFR