Alta Semper portfolio firm in Egypt revives IPO plan

 Alta Semper portfolio firm in Egypt revives IPO plan

Cairo-based Macro Group Pharmaceuticals SAE, which makes products for skin and hair care, has decided to revive its initial public offering (IPO) on the Egyptian Exchange (EGX) after deferring the share sale last year due to market headwinds.

Macro received approval from the Financial Regulatory Authority (FRA) last week to float a 45.8% stake at a fair value of approximately EGP3.5 billion ($222.5 million).

The FRA approval lasts for a month, though this could be extended as per a proposal that is yet to get a green light.

Macro had commenced the IPO process last April via a secondary sale where it had priced shares between EGP5.30-6.15 apiece, valuing it between EGP3.1-3.6 billion. But the company withdrew its issue due to the state of the broader markets in the country. Benchmark index EGX 30 had declined around 10% since January leading to the proposed IPO then. The 70-stock small and mid-cap index, EGX 70 EWI, had slipped more than 20% in the same period.

Macro Group’s controlling shareholders were likely wary about the state of the stock after the IPO, The Capital Quest has learnt.

The controlling shareholders, which include private equity firm Alta Semper, were looking to sell a little over half of their 80% stake. While the remaining stake would have had a lock-in period, the PE firm was concerned about liquidity after the listing, it is learnt.

CI Capital and Renaissance Capital Egypt were joint global coordinators and joint bookrunners. White & Case was international and local counsel (in association with MHR & Partners) for the firm. Dechert and Zaki Hashem & Partners Attorneys at Law were counsels to CI Capital and Renaissance Capital.

Macro Group

Macro Group was set up in 2005. It is believed to have nearly a quarter of the country’s cosmeceuticals market share, more than three times that of its closest local competitor.

The company has a portfolio of 125 marketed stock-keeping units. This consists of 124 cosmeceutical SKUs across seven therapeutic areas and one nutraceutical, which was launched in December 2020. All products are available over-the-counter, though Macro also has a prescription-based sales strategy.

In 2020, the company recorded revenue of EGP430.5 million and earnings before interest, tax, depreciation and amortization (EBITDA) of EGP186.5 million. Net profit for 2020 came in at EGP135.1 million

Revenue clocked annualized growth of 34% during 2018-2020 while EBITDA surged 92% and net profit climbed 98%.

Vivek Sinha

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The Capital Quest