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Annual Palestinian Capital Market Forum Nov. 21 st , 2011 Hikma Pharmaceuticals IPO

Annual Palestinian Capital Market Forum Nov. 21 st , 2011 Hikma Pharmaceuticals IPO Samih T. Darwazah. Group at a glance Continuously delivering strong growth. Group revenues ($ million). Why IPO?. 1. Enhance ability to raise capital for acquisitions

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Annual Palestinian Capital Market Forum Nov. 21 st , 2011 Hikma Pharmaceuticals IPO

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  1. Annual Palestinian Capital Market Forum Nov. 21st, 2011 Hikma Pharmaceuticals IPO Samih T. Darwazah

  2. Group at a glance Continuously delivering strong growth Group revenues ($ million)

  3. Why IPO? 1. Enhance ability to raise capital for acquisitions 2. Strengthen balance sheet to continue growth strategy 3. Strengthen corporate governance and accountability 4. Attract and retain key executives and employees (stock option plans) 5. Raise international profile to enhance relationships with customers, suppliers and partners

  4. Why list on the London Stock Exchange? 1. Considered US (NASDAQ, NYSE), UK (LSE) and Middle East (Dubai, Jordan) 2. Major factors considered in choosing listing: • Access to a large pool of international and regional investors • Long term sustainable investor base (and valuations) • Market familiarity with generic pharma sector • Coverage by international research analysts • Regulatory requirements and ongoing costs 3. US introduced stringent control laws after Enron and Tyco scandals (Sarbanes – Oxley) which were lengthy and detailed extremely expensive and lengthy to implement. London had straight forward strict values and less bureaucratic.

  5. Hikma’s Global Offer 1. Listed on LSE on 1 November 2005 2. Raised $265 million of which approx. $125 million for issuance of new shares receivable by Company 3. Market capitalisation of $860 million at Offer Price 4. Included in FTSE 250 Pharmaceuticals and Biotechnology sector as of December 2005

  6. Broad mix of institutional investors • Hedge funds • Meditor Capital Management • Moon Capital • Oaktree Capital • Pequot Capital • Theorema Asset Management • Middle Eastern institutions • ADIA • Export & Finance Bank • National Bank of Kuwait • Dubai Bank • Shuaa Capital • UK institutions • Barclays Global Investors • Baring Asset Management • Hermes Pensions Management • JP Morgan Asset Management • Legal & General • Morley Fund Management • State Street Global Advisors • European institutions • APO Asset Management GMBH • DWS Investment GMBH • DIT Gesellschaft • HBM Partners • Union Investments Privatfonds GMBH • Shell Pensioenfonds Beheer B.V. • US institutions • AIM Advisors • American Century • Capital Research • GE Asset Management • Principal Global Investors • Putnam Investments

  7. What has changed by going public 1. Interaction with investors / fund managers 2. Greater emphasis by management on monthly financial results (sales growth and operating margins) 3. Additional legal requirements 4. Corporate governance (independent Board members) 5. Corporate costs increased

  8. Advice for other companies considering IPO • Advance Preparation (1-3 years prior to IPO date) : • Addition of new management team (CFO) • Clean accounts and prepare audited (auditable) financials • Strengthen management reporting and budgeting systems • Formalize outside and related party relationships (Data room) • Develop business plan • Meet different financial advisors

  9. Advice for other companies considering IPO…continued 1. Proper choice of advisor/s 2. Senior Management understanding of the process and commitment 3. CEO involvement and commitment

  10. Thank You

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