Lab supplier VWR sets terms for $600 million IPO

VWR, a Madison Dearborn-backed supplier of chemicals and other laboratory products, announced terms for its IPO on Wednesday. The Radnor, PA-based company plans to raise $600 million by offering 25.5 million shares at a price range of $22 to $25. At the midpoint of the proposed range, VWR would command a market value of $3.0 billion.

History
VWR was spun off of Univar (UNVR) as a public company in 1986 and was acquired by Merck in 1999, bought by CD&R in 2004 and then sold again to Madison Dearborn Partners (80% post-IPO stake) for $3.6 billion in 2007. The company offers a broad portfolio of branded and private label laboratory products to over 120,000 customers, including 227 Fortune 500 companies, and has the #1 market share in Europe and the #2 market share in North America. 

More chemicals in the pipeline
VWR's former parent company, Univar, filed for an IPO that we estimate could raise $1 billion in June 2014. Chemical maker PQ Holdings (PQH), which filed for a $450 million IPO in February, may delay its offering afternews broke that Blackstone sold a 47% stake to CCMP. Two producers of crop protection chemicals recently filed as well: Adama Agricultural Solutions (ADMA.RC) and Arysta LifeScience (ARYS).

Recent financial results
For the six months ended June 30, 2014, revenue grew 4% to $2.1 billion, driven primarily by acquisitions and favorable foreign currency rates. Gross margin grew 30 bps to 28.9% due to efficient pricing and a more favorable product and customer sales mix, partially offset by changes to its agreement with Merck. Adjusted EBITDA rose 12% to $217 million and adjusted EBITDA margin improved 70 bps to 10%.

VWR, which was founded in 1852 and booked $4.3 billion in sales for the 12 months ended June 30, 2014, plans to list on the NASDAQ under the symbol VWR. BofA Merrill Lynch, Goldman Sachs, J.P. Morgan, Barclays, Deutsche Bank, Citi, Jefferies and William Blair are the joint bookrunners on the deal. It is expected to price during the week of September 29, 2014.