Report: Siemens to tap banks for Healthineers listing

Siemens (NYSE:SI) is reportedly ready to tap investment banks as it readies a public listing for its Healthineers business.

Citing “3 people close to the matter,” Reuters said the German industrial conglomerate plans to invite investment banks in early April to pitch for roles in an initial public offering. Goldman Sachs has already been asked to look after some preparatory tasks for the IPO, according to the news service.

“Goldman Sachs will very likely emerge as one of the global coordinators of the Healthineers IPO,” 1 of the sources told Reuters, adding that Healthineers would be listed in late 2017 provided equity markets were favorable.

Siemens and Goldman Sachs declined to comment.

The healthcare business, which Siemens rebranded last year to worldwide scorn, is the company’s most profitable unit with an estimated enterprise value of roughly €36 billion to €37 billion ($39 billion to $40 billion).

Barclays Capital, which rates Siemens “equal weight,” estimates that that represents around 15 times 2018 earnings before interest, tax and amortization, compared with 10.4 times for the trains-to-turbines group as a whole.

“This is quite a high multiple factoring the strong cash generation and stable margin. However, top line growth has been muted and there are some headwinds ahead in both the U.S. and China, in our view,” Barclays analyst James Stettler said.

($1 = €0.9326)

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