Pimi Fund Pushes Rafa Pharma IPO Despite 30% Valuation Cut
The Pimi investment fund, led by Ishay Davidi, is continuing to advance the initial public offering (IPO) of Rafa Laboratories, a pharmaceutical company managed by Ido Leshem and chaired by Uri Yehudai, despite a recent downward revision in the company's valuation. Rafa published an amendment to its prospectus revealing a valuation of approximately 1.55 billion shekels, about 30% lower than the over 2 billion shekels valuation stated in the original prospectus from May. Correspondingly, the expected gross proceeds from the share sale have been reduced to around 910 million shekels, down from over one billion shekels previously planned.
The updated prospectus includes positive management forecasts, projecting net profits of 100 million shekels in 2025, rising to 120-130 million shekels in 2026, and 150-170 million shekels in 2027. The offering will include about 34.8 million shares, representing 35.6% of the company's equity, compared to 50.1 million shares (about half the equity) in the earlier version. If all options are exercised, public ownership could reach 57%, while Pimi's stake would decrease to 43%. The IPO is backed by an underwriting commitment covering 869,500 units, about a quarter of the offering.
Founded in 1937 and employing around 260 workers at its Jerusalem facility, Rafa develops, manufactures, and markets over 100 pharmaceutical products, including generics and therapeutic treatments. It is also expanding in the bio-defense sector, producing emergency auto-injectors and developing treatments for trauma, pain, and chemical, biological, and nuclear threats. The company recently secured up to $186 million in funding from the U.S. Department of Health to develop a hemorrhage treatment injector.
Pimi acquired control of Rafa less than six years ago for 700 million shekels from the Sackler family amid their opioid litigation issues. The current IPO represents a partial exit for Pimi, which holds 88% of the company pre-IPO. The fund's share of the offering proceeds is estimated at about 800 million shekels, a 20% decrease from earlier plans. Other shareholders include the Levin family, heirs of the founder, holding 12%, and partners Phoenix Insurance and Bank Hapoalim's equity arm, holding about 15% combined. Together, Pimi and its partners expect to realize over one billion shekels in profit from their original investment.
