Ascendis Health could soon disappear from the JSE, 10 years after the healthcare start-up debuted on the public platform amid fanfare before descending into a nightmare for shareholders.
Ascendis, which owns vitamins brands and medical devices, said on Wednesday that it had initiated a process to look into the potential delisting “as the next step in its strategy to unlock value and return capital to Ascendis shareholders”.
The early discussions are being conducted with a consortium led by ACN Capital, a private-equity outfit controlled by its acting CEO Carl Neethling.
“There is no offer on the table at this stage or a guarantee that an offer will be made,” Ascendis said in a statement.
It also cautioned shareholders that the potential offer price would not be at a significant premium to the prevailing share price of 69c.
Ascendis is much leaner and in better shape after fixing its balance sheet through an effective fire sale of its assets, including crown jewels.
The company listed at about R11 in November 2013 and two years later shot up to R29 as it embarked on an international growth strategy, which later came back to haunt the then-management as debt accumulated to unsustainably highly levels.
The owner of the Solal, Junglevite and Bettaway vitamin brands has since managed to wean itself off a debt burden of up to nearly R8bn, but the efforts are yet to reflect on the share price that is well below its listing price.
Two years ago, Ascendis concluded a debt-for-asset swap with London-based lenders that walked away with some of Ascendis’s profitable offshore operations including the cash-generative Cyprus-based Remedica business in exchange for settling the bulk of its €444m debt.
It has sold its Ascendis Skin and Body business that included the Nimue brand and its 49% stake in Spanish drug company Farmalider, as well as the Respiratory Care Africa and Animal Health businesses.
It was set to sell its medical device business in 2022, but the division was kept inside the business by the new board that included Neethling.
Ascendis’s plans to go private follow in the footsteps of Advanced Health, which announced in June that it aimed to delist from the JSE.
Like Ascendis, Advanced Health went public a decade ago with grand vision of rolling out affordable and high-quality day hospitals in SA. But its plan to be an alternative to pricier, well-established players proved difficult to realise. The company ran into losses in its SA market, leading to a cash crunch and rights issue.
A growing list of small- to medium-sized companies have delisted from the JSE in recent years due to several factors that included corporate action, as well as liquidity and “onerous” listings requirements.
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