Carlyle Readies 3 Large IPOs In 2020

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Carlyle Readies 3 Large IPOs In 2020

January 27, 2020 Syndicated 0

Private equity is eyeing public markets.

Three large Carlyle portfolio companies have already filed for US IPOs in the first few weeks of 2020, following a notable absence in 2019.

  1. 1Life Healthcare, a.k.a. One Medical (ONEM) is first up: The fast-growing medical clinic operator aims to raise $263 million at a $2.1 billion diluted market cap in the final week of January. Founded in 2007, One Medical is rapidly expanding its US footprint as it tackles consumer dissatisfaction with healthcare providers; the company grew sales by about 34% in the 4Q19 to $78 million, but with an operating loss of $19 million.In addition to Carlyle (23% post-IPO stake), backers include Benchmark (11%), Oak Investment Partners (10%), DAG Ventures (7%), GV (5%), and JP Morgan (5%).
  2. PPD (PPD), f.k.a. Pharmaceutical Product Development, filed for an IPO that we estimate could raise $1 billion. LBO’d by Hellman & Friedman and Carlyle in 2011 for $3.9 billion, the contract research organization (CRO) served each of the world’s top 50 biopharmaceutical companies in 2018, as ranked by R&D spend, and was involved in 66 drug approvals. With nearly $4 billion in LTM revenue, the company has a stable business with strong free cash flow, which it will need to pay down its massive debt burden.In addition to Hellman & Friedman (57% pre-IPO stake) and Carlyle (24%), backers include Procific (9%) and GIC Private Limited (9%).
  3. Atotech (ATC) looks like another potential billion-dollar deal in the IPO pipeline. Carved out of Total (NYSE:TOT) and acquired by Carlyle in 2016 for $3.2 billion, the German chemicals group is large, profitable, and has a greater market share than competitors in its target markets, electroplating and general metal finishing. Atotech boasts a 32% adj. EBITDA margin, though its revenue grew just 2% in 2018, and turned negative in the first nine months of 2019.Carlyle is the sole PE sponsor listed in Atotech’s prospectus.
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Beyond the public IPO pipeline, other Carlyle-backed companies on Renaissance Capital’s radar include:

• Addison Lee: The London-based Uber (NYSE:UBER) rival was acquired in 2013 for £300 million ($390 million), and recent reports have indicated that Carlyle is exploring a sale, or a US listing via SPAC acquisition.

• Ortho Clinical Diagnostics: Acquired in 2014 for an estimated $4 billion, Carlyle had reportedly selected banks for an IPO of the in-vitro diagnostics company in late 2017. Since then, the company has shuffled management twice, most recently appointing former Cochlear CEO Chris Smith as its chief executive.

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