02 Mar 2021

Macro Group Pharma Intends to IPO 1-2Q21

Macro Group Pharma is set to become Egypt’s second IPO this year, after announcing overnight its intention to initiate an initial public offering (IPO) of its shares on the EGX in late 1Q21 or early 2Q21.

The offering will see 49% of Macro up for grabs as shareholder Leo 1 sells 282.9mn ordinary shares in a secondary sale, meaning existing shareholders will offer part or all of their stakes to the public, and no new shares will be offered. The sale will include private offerings to both institutional investors in Egypt and abroad, as well as retail investors here at home.

Expect to see indirect shareholders Enverson International Company, MEA Healthcare Partners, and Macro co-founder Ahmed El Nayeb among those selling down their positions in Macro through Leo 1, in which they each hold indirect stakes. Leo 1 is a special-purpose investment vehicle that holds 99.9% of Macro.

Macro Group Pharmaceuticals (Macro Capital), the largest and one of the fastest growing cosmeceutical companies in Egypt. Established in 2005,

Macro Group leads Egypt’s fast-growing cosmeceuticals space, with a market share of 23.1% recorded in 2020. The company’s EBITDA grew by a 2018-20 CAGR of 92% to EGP187mn in what was a challenging pandemic year, testament to the company’s defensive demand-profile, robust business model, and resilient growth strategy. Combined, these factors are expected to drive future growth in this new stage of its corporate evolution. Macro Group boasts a diversified portfolio of 125 marketed SKUs, which consists of 124 cosmeceutical SKUs across seven therapeutic areas and one nutraceutical SKU, which was launched in December 2020. While all of the company’s products are available over-the-counter (OTC), Macro also utilizes a prescription-based sales strategy and generates demand through an incentivized medical salesforce of over 550 employees that target physicians and pharmacies nationwide. 85% of sales are estimated to be initially generated via prescription at the physician level, underlining the defensive demand-profile of Macro Group’s business.

Meanwhile, an advantageous regulatory framework enables the company to leverage its extensive in-house innovation capabilities, having developed an extensive pipeline of 79 products across a variety of high-growth, high-margin cosmeceutical and nutraceutical therapeutic areas, which are expected to be launched between 1Q21 and 2Q23.

Macro Group is in the process of obtaining the required approvals and registrations related to the combined offering, including from the Egyptian Financial Regulatory Authority (FRA) and the EGX. Completion of the combined offering is expected to take place late 1Q21/early 2Q21, subject to market conditions and the timely receipt of the relevant regulatory approvals. (Source: Company disclosure, CI Capital, Enterprise)