Siemens to pick banks for blockbuster Healthineers listing: sources

Wed Jan 25, 2017 11:32am EST
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By Arno Schuetze and Georgina Prodhan

FRANKFURT (Reuters) - German industrial group Siemens (SIEGn.DE: Quote) will shortly start picking banks to organize a stock market listing of its healthcare business, which could be valued at up to 37 billion euros ($40 billion) including debt, three people close to the matter said.

Siemens will invite investment banks in early April to pitch for roles in the initial public offering (IPO), which could be the biggest since the flotation of German energy group Innogy (IGY.DE: Quote) in October, the people said.

They said that Goldman Sachs (GS.N: Quote) had already been asked to look after some preparatory tasks for the IPO.

"Goldman Sachs will very likely emerge as one of the global coordinators of the Healthineers IPO," one of the sources said, adding that Healthineers would be listed in late 2017 provided equity markets were favorable.

Siemens and Goldman Sachs declined to comment.

Analysts estimate the business, Siemens's most profitable, has an enterprise value of around 36 to 37 billion euros.

Barclays Capital, which rates Siemens "equal weight", estimates that that represents around 15 times 2018 earnings before interest, tax and amortization (EBITA), compared with 10.4 times for the trains-to-turbines group as a whole.

"This is quite a high multiple factoring the strong cash generation and stable margin. However, top line growth has been muted and there are some headwinds ahead in both the U.S. and China, in our view," Barclays analyst James Stettler said.   Continued...

Siemens logo is pictured at a building of the manufacturing plant of Siemens Healthineers in Forchheim near Nuremberg, Germany, October 7, 2016. REUTERS/Michaela Rehle