Healthineers: A Strategic IPO

15 Pages Posted: 25 May 2019 Last revised: 10 Jul 2020

See all articles by Robert S. Harris

Robert S. Harris

University of Virginia - Darden School of Business

Paul Holtz

University of Virginia - Darden School of Business

Abstract

This case covers the initial public offering (IPO) of the Siemens subsidiary Healthineers. The March 2018 offering of the health care technology firm was heavily anticipated on the Frankfurt Stock Exchange, and was Germany's largest IPO in more than 20 years.Healthineers was one of Siemens' most successful businesses, and its management board had a keen interest in its long-term success and in the valuation that financial markets would place on the company. The case allows students to learn about the IPO process, understand Siemens' strategic rationale, and estimate the value of Healthineers.

Excerpt

UVA-F-1881

Rev. Jul. 6, 2020

Healthineers: A Strategic IPO

By early March 2018, CEO Joe Kaeser and the management board of Siemens AG (Siemens) had been focused on the progress of its Healthineers subsidiary for several years. Management planned an initial public offering (IPO) of Healthineers in mid-March to support the company's continued success and spur entrepreneurial independence. The IPO would position Healthineers to compete successfully in the global health care market, which was quite different from other sectors in which Siemens—a global technology conglomerate—operated (see Exhibit 1). Though Siemens would maintain a substantial equity interest, Healthineers would become a separate public company with increased flexibility and autonomy.

Because Siemens would be a long-term shareholder, Kaeser and the board had a keen interest in Healthineers's strategy and performance. Would the company continue to drive profitable growth in the short term? Tap into adjacent growth markets in the medium term? Be a market leader in health care? In the immediate term, the board was especially interested in what value financial markets would place on Healthineers in the IPO.

Siemens Healthineers AG

. . .

Keywords: initial public offering, valuation, financial analysis, health care markets, corporate strategy, stock exchanges, international

Suggested Citation

Harris, Robert S. and Holtz, Paul, Healthineers: A Strategic IPO. Darden Case No. UVA-F-1881, Available at SSRN: https://ssrn.com/abstract=3393822

Robert S. Harris (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4823 (Phone)
434-924-4859 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/harris.htm

Paul Holtz

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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