Deeside based ConvaTec to raise £1.4bn in IPO offering while NuPhram looks set to close with the loss of 66 jobs
The contrast couldn’t be any starker, one Deeside Industrial Park based company looks set to raise millions from its first sale of stock to the public.
ConvaTec has said it plans to raise around £1.4 billion in an initial public offering (IPO) the company’s first sale of stock to the public.
The other, NuPharm has said it’s “not capable of becoming an earnings enhancing business”and plans to close with the possible loss of 66 jobs – at Christmas!
ConvaTec’s flotation would be the biggest in Britain so far this year according to city experts.
The company which manufactures products including wound dressings and colostomy bags, said it expected at least 25 percent of its shares would be freely tradeable following the flotation.
ConvaTec could have a market value of about £5.7 billion, proceeds from the listing which is expected in late October or early November will be used to pay down debt.
The company was founded in 1978 and has 9,000 employees, over 1000 of which work in the UK it operates in more than 100 countries.
Research and development work is carried out at their Deeside Industrial Park site.
Paul Moraviec, chief executive, said ConvaTec operates in a growing market, driven by ageing populations which suffer from prolonged chronic health problems.
“This creates high levels of recurring revenues, with many chronic care patients using our products for life,” he said.
“To drive additional growth we are actively investing in the evolution of our product portfolio to deliver further benefits to patients and healthcare providers, and in pursuing opportunities to enter new markets.”
Sir Christopher Gent, former boss of Vodafone and ex-chairman of GlaxoSmithKline, will step into the role of chairman when ConvaTec goes public.
The news of the IPO comes in stark contrast to fellow Deeside Industrial Park pharmaceutical company NuPharm who announced they will be closing their business in December with the loss of 66 jobs.
The move comes after the parent company reported a drop in pre-tax profit during the first half of its financial year.
Quantum say they expect the Deeside Industrial Estate business will close by the end of December.
Quantum Pharma, a County Durham headquartered pharmaceutical manufacturer bought Nupharm and Nupharm Laboratories last July in deal worth £13m but both have continued to generate cash losses.
A spokesperson for Nupharm told Deeside.com:
“The number of employees at NuPharm in Deeside is 66.
All those jobs are at risk as part of the consultation process we started yesterday (Tuesday).
The proposed plan on which we are consulting would anticipate NuPharm cease trading by the end of the year.”
The company has issued a statement saying:
“Despite continued investment and the dedication of management time since its acquisition in July 2015, NuPharm has continued to generate significant cash losses each month, absorbed significant management resources and remains subject to MHRA manufacturing restrictions.
“The Board of Quantum Pharma Plc has concluded that it would take unacceptable further cash losses and management time to try to address the operational issues and that NuPharm is not capable of becoming an earnings enhancing business.
Other alternatives were examined but were not considered viable. The Board believes that the best available course of action is to commence a closure of the business in an orderly fashion.
Therefore, Quantum is commencing the consultation process with staff regarding the proposed closure of the NuPharm business.
The proposed closure plan will also be communicated to customers, suppliers and the MHRA today.
The Board envisages that NuPharm will cease trading by the end of December 2016.
The proposed closure plan will allow Quantum Pharma to focus on its core profitable specials business which produces the platform for its Niche Pharmaceutical product growth.”
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