Mead Johnson preps for IPO
This article was originally published in The Tan Sheet
An initial public offering for Bristol-Myers Squibb's subsidiary, Mead Johnson Nutrition, will initialize the week of Feb. 9 at a price of $21 to $24 per share of Class A common stock, which will trade under the ticker symbol MJN. Net proceeds are estimated at $530 million to $610 million, depending on whether underwriters exercise over-allotment actions, according to a prospectus filed Jan. 28. Based on the implied IPO price, the marketer of Enfamil pediatric formula likely will have 200 million shares and a market value of $4.5 billion, according to Deutsche Bank analyst Barbara Ryan. BMS intends to maintain an 80 percent to 90 percent ownership stake in Mead Johnson, which generated $2.88 billion in net sales in 2008. In April 2008, BMS announced plans to spin off the nutritionals business in an IPO rather than sell it (1"The Tan Sheet," April 28, 2008, p. 14)
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Highlights from the Q1 2009 review of pharmaceutical and biotechnology dealmaking: With 57 transactions raising $1.09 billion, financing activity for Q1 2009 showed a 137% increase over Q4 2008's total. The largest deal was an initial public offering--Bristol-Myers Squibb Co. sold off 15% of Mead Johnson Nutrition Co. for $684 million-the first since Bioheart Inc.'s February 2008 IPO. In M&A, Big Pharma mega-mergers was the big story as two major players--Wyeth and Schering-Plough--were scooped up by Pfizer Inc. and Merck & Co. Inc., respectively, in deals together valued at $109 billion, making up 96% of the Q1 M&A dollar volume. Biopharma alliances-with a 25% decrease in number of deals--only reached about half the dollar volume of Q4 2008, but Bristol-Myers Squibb continued its strong performance along with several other Big Pharma players that joined the playing field; GlaxoSmithKline PLC and Novartis AG, each with five alliances, tied as the quarter's most active deal makers. Much of the fourth quarter's alliance activity followed an option-based deal structure with the biotech handling R&D through pre-proof-of-concept after which the Big Pharma partner then takes over later-stage development and commercialization.
Bristol-Myers Squibb will spin off its Mead Johnson infants and children nutritional products business in an initial public offering of shares rather than sell the unit, the firm says
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