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Siemens and Healthineers: Valuing the IP...

Harris, Robert S.,...

Case

Siemens and Healthineers: Valuing the IPO

Harris, Robert S.; Holtz, Paul

F-1913 | Published September 13, 2019 | 15 pages Case

Collection: Darden School of Business

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This case covers the initial public offering (IPO) of the Siemens AG subsidiary Healthineers. The case offers the opportunity to discuss IPOs and to value the company. In contrast to “Healthineers: A Strategic IPO” (UVA-F-1881), which provides some base case valuation analysis, this version of the case is designed to be used when a primary teaching objective is to have students perform more of the analysis. The material is set in 2018, when CEO Joe Kaeser and the management board of Siemens planned an IPO of its Healthineers subsidiary 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. While Siemens would maintain a substantial equity interest, Healthineers would become a separate public company with increased flexibility and autonomy. In the immediate term, the management team was especially interested in what value financial markets would place on Healthineers once it was a public company.

To explore aspects of the changing global health care industry To discuss the nature of the IPO process and role of investment banks To assess the value of the company and its attractiveness as an investment To conduct valuations using multiples, discounted cash flow, and sum of the parts