Apotex workers in Toronto in April, 2021.Nathan Denette/The Canadian Press
Apotex Inc. plans to go public this year with a share sale worth up to $1-billion that will allow its private equity owner to cash in on the generic drugmaker it acquired after the murder of its founder, Barry Sherman.
Three years after acquiring Apotex from the estate of Mr. Sherman and his wife Honey, who were killed at their Toronto home in December, 2017, New York-based SK Capital Partners LP has hired investment banks to sell a minority stake in the company with an initial public offering, according to three sources working on the IPO.
The Globe and Mail is not naming the sources because they are not permitted to speak for the company. SK Capital is expected to maintain a controlling interest in Apotex after the IPO.
Toronto-based Apotex is Canada’s largest pharmaceutical company, with 6,000 employees churning out 25 billion doses of medicine each year and selling in 70 countries.
Mr. Sherman founded the business in 1974 and was famously litigious, fighting court battles over drug patents with name-brand pharmaceutical companies and generic rivals. The Shermans’ killings have never been solved.
Andrew Willis: Canadian IPO market could warm up in 2026 as Bay Street eyes U.S. debuts
SK Capital, a private equity fund focused on life sciences, acquired Apotex in 2023 for an estimated $3-billion. Last fall, the fund manager hired RBC Capital Markets, Jefferies Financial Group Inc. and TD Securities to lead the IPO, the sources said, with approximately a dozen other banks included in the selling syndicate.
Apotex and SK Capital declined to comment.
The news that Apotex is considering an IPO was first reported by Bloomberg late Monday.
The IPO will be a coming-out party for an Apotex executive team recruited by SK Capital, as they highlight the evolution of what was an entrepreneur-run company. Chief executive officer Allan Oberman is expected to lead a marketing campaign focused on Apotex’s strategy of producing affordable medicine for cost-conscious customers and constantly adding new drugs to its portfolio, the sources said.
Mr. Oberman is a former executive at Tel Aviv-based Teva Pharmaceutical Industries Ltd., a leading global generic manufacturer and Apotex’s rival. Mr. Oberman was CEO of Teva’s Canadian division and also ran drugmakers Concordia International Corp. and Sagent Pharmaceuticals Inc.
When Mr. Oberman joined the company three years ago, he said in a press release: “As a competitor to Apotex for many years, I am very familiar with the company and have admired its people, long-term track record of innovation and commitment to making medicines affordable.”
Canada’s IPO market set for revival, signaling economic confidence
Apotex’s leaders include two other Teva veterans, Ariel Alon, the company’s chief operations officer, and chief corporate development officer Barry Fishman. The executives are expected to retain significant investments in Apotex after the IPO.
Over the past year, Apotex won licences to produce drugs that treat throat and skin cancers, leukemia, vision problems and testosterone replacement.
Last February, Apotex moved into vitamins by purchasing Toronto-based CanPrev Natural Health Products, one of the country’s largest supplement manufacturers. CanPrev sells 445 products online and through 3,400 retail outlets.
SK Capital has approximately US$10-billion invested in a portfolio of 20 businesses. Executives with backgrounds in chemistry, health care and accounting founded the fund manager in 2007.
If Apotex does make a debut on the Toronto Stock Exchange with a $1-billion offering, it will be the largest IPO since insurer Definity Financial Corp. sold $1.6-billion of stock in 2021.
Last year, there were only two IPOs on the TSX, the largest of which saw Rockpoint Gas Storage Inc. raise $704-million in October. Bankers predicted IPO activity would pick up this year, in part because private equity fund managers like SK Capital want to sell investments, return capital to their backers and raise new funds.
Two Canadian technology developers, Xanadu Quantum Technologies Inc. and General Fusion Inc., are both preparing to go public by merging with U.S.-listed special purpose acquisition companies; Xanadu shares will trade on both the Nasdaq and Toronto stock exchanges, becoming the first technology company to list on Canada’s senior equities market in more than four years.