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Carlyle readies 3 large IPOs in 2020

January 23, 2020

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%).

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  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%).

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  4. Atotech (ATC) looks like another potential billion-dollar deal in the IPO pipeline. Carved out of Total 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.

Upcoming Carlyle-backed IPOs
Issuer
Business
Deal
Size
Sector Carlyle's
Position
1Life Healthcare (ONEM) $263M Health Care #1 (23% post-IPO)
Operates 77 membership-based health clinics under the One Medical brand.
PPD (PPD) $1,000M* Health Care #2 (24% pre-IPO)
LBO'd contract research organization that provides drug development services.
Atotech (ATC) $1,000M* Materials #1 (% not given)
Carlyle-backed specialty chemicals company carved out of Total.
*Deal size is RC estimate.

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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 (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.