Siemens Summons Three Banks for IPO of Healthineers Unit

Siemens AG is looking to take its Healthineers unit public.

The German company has tapped three banks, Goldman Sachs, Deutsche Bank and JP Morgan, to help take the unit public, Reuters reported this morning. The company confirmed to Reuters that it had awarded “global coordinator mandates” to banks, but failed to name them. Reuters said the banks were identified by unnamed sources familiar with the matter.

Medtech company Siemens Healthineers was formerly known as Siemens Healthcare. Siemens Healthineers is the separately managed healthcare business of Siemens AG. Taking the Healthineers business unit public would allow it to make moves to grow the business as is necessary. Being a publicly-traded entity will allow the Healthineers unit to “do share deals when looking at future acquisitions,” an unnamed source told Reuters. Some companies that the Healthineer unit could potentially work with in collaboration or as possible acquisition targets include Varian, Agilent and Accuray, Reuters noted.

“The equity story of Healthineers will likely be that of a low-growth, low-risk dividend play with high, guaranteed dividends,” a person familiar with the company told Reuters.

This is not the first time that Siemens has hinted at taking the Healthineers unit public. In August, Reuters reported that the parent company was planning an IPO in the first half of 2018. The IPO was expected to value the business at up to $47 million.

While the company may be planning to go public, the Healthineers unit has been busy expanding in the United States. In July, Healthineers broke ground on a $300 million expansion in Massachusetts for its laboratory diagnostics manufacturing and research and development facility. The $300 million investment represents one of the single largest investments the company has made in the U.S. The expansion project, which will take approximately four years, will allow Siemens to hire 700 additional people over the next 10 years. The expansion will add an additional 300,000 square feet to the current 500,000 square feet at the Walpole site. The expansion will include manufacturing space, warehouse space, office space and lab space. The new facility is expected to allow the company to meet product challenges, increase efficiency and reduce costs.

The Walpole site is the primary manufacturing facility for assays that run on the ADVIA Centaur family of immunoassay instruments, and for consumables for the company's molecular and blood gas testing instruments.

Not only is the Healthineers unit growing due to the multi-million expansion project, the company will also see a boost after the U.S. Food and Drug Administration approved its new magnetic resonance imaging (MRI) scanner. Earlier this month, the FDA cleared the MAGNETOM Terra MRI machine, which provides higher resolution and faster acquisition times in clinical applications.