It’s not often that the U.S. IPO market hosts an offering from Italy, but this week, we can say “Ciao” to an Italian company. The Stevanato Group expects to issue 40 million shares at a range of $21 to $24. Its market valuation is estimated to be nearly $7 billion, and the underwriters are Morgan Stanley (MS), Bank of America (BAC), Jefferies, Citigroup (C), UBS Investment Bank (UBS), KeyBanc Capital Markets, Wells Fargo (WFC), and William Blair.
Stevanato Group is a developer of glass and plastic drug containment and diagnostic systems. The company actually was started in Venice in 1949 and the founder was Giovanni Stevanato. In fact, the current Director and Chairman of the Board Emeritus, Sergio Stevanato, is his son. He has spent his entire career in the family business.
Stevanato Group originally was a small glassware manufacturer. During the 1970s, the company diversified into the healthcare industry, and then in 2005 it began its global expansion with the acquisition of Medical Glass.
Now let’s take a deeper look at the operations.
Backgrounder on the Stevanato Group
The company’s products and services relate to the entire drug life cycle, from the development to the clinicals to the commercialization. The benefits for pharmaceutical customers include improved safety and effectiveness, reduced time to market and lower supply chain risks.
Developing this platform has taken significant investments in R&D. All in all, this represents an important competitive advantage. The company has also been smart to integrate its products within the workflow processes of its customers.
According Stevanato Group’s S-1 document: “As a result of our commitment to manufacturing excellence and the breadth of our footprint, our customers view us as a functional extension of their operations. We are subject to rigorous audits by certification bodies and our customers, who perform more than 100 audits a year (other than 2020 which was affected by COVID-19 restrictions) on our manufacturing facilities.”
In terms of growth, it has been robust. From 2019 to 2020, revenues jumped from €536.5 million to €662 million. The company is also profitable and generates strong cash flows, with the EBITDA coming to €57.2 million last year.
Stevanato Group’s addressable market is sizeable. Based on its own estimates, spending is over $11 billion for biopharmaceutical injectables and in-vitro diagnostic products.
Even better, Stevanato Group is addressing some of the high-growth segments. These include biologics, biosimilars, vaccines and molecular diagnostics.
Bottom Line on the Stevanato Group IPO
The reputation for the Stevanato Group is standout. It is known for its high quality and reliability, which is indicated by the more than 700 companies that rely on its products. Those include 41 of the top 50 pharmaceutical companies, eight of the ten largest in-vitro diagnostic companies and 15 of the top 20 biotech companies on the Nasdaq Biotechnology Index.
Stevanato Group is also positioned to benefit from a myriad of secular changes. Just a few include the demand for pharmaceutical innovation, the acceleration of vaccine programs, the rise of self-administered medicines, the increase in regulations, and the aging of the global population.
Thus, it seems like a good bet that there will be a positive reception of the Stevanato Group IPO. The company will start trading on Thursday under the ticker of STVN on the NYSE.
For other upcoming IPOs, you can check out the TipRanks IPO calendar.
Disclosure: Tom Taulli does not have a position in Stevanato Group stock.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
