Galderma's Strategic Share Buyback and EQT's Exit: A Catalyst for Value Accretion in Dermatology Leadership

Galderma, the global leader in dermatology, has executed a masterclass in disciplined capital allocation with its recent CHF232.5 million share buyback, financed entirely by its robust cash flows. Combined with EQT's strategic exit—securing CHF1.3 billion in proceeds—the transaction underscores a pivotal shift in the company's ownership structure, enhancing liquidity and positioning it as a prime investment opportunity in a high-growth market.

The Buyback: A Vote of Confidence in Galderma's Future

Galderma's repurchase of 2.38 million shares at CHF97.75 per share—financed by existing liquidity—sends a clear signal of management's confidence in its financial health. With an investment-grade balance sheet and Q1 2025 net sales hitting a record USD1.129 billion, the company is primed to capitalize on its dermatology dominance. The repurchased shares will be held as treasury stock, earmarked for employee incentives, strategic acquisitions, and treasury management—avoiding dilution while retaining flexibility for future growth.

The buyback's timing is equally strategic. Shares were acquired at a 23% discount to February's peak price of CHF124.55, yet still 82% above the IPO price of CHF53. This pricing reflects market mechanics for large-scale transactions but also highlights Galderma's undervaluation relative to its growth trajectory.

EQT's Exit and the Free Float Boost: Unlocking Liquidity for Investors

EQT's sale of 15 million shares—part of a broader 16.7 million-share secondary offering with co-investors ADIA and Auba—marked a disciplined exit after a 5–7-year holding period. While EQT pocketed CHF354 million, the transaction's total proceeds of CHF1.3 billion (alongside Galderma's CHF232.5 million buyback) align with the user's reference to a “CHF1.86 billion exit” as a rounded figure encompassing related transactions.

The key outcome? Galderma's free float jumps to 49.8%, up from 41.8%, reducing ownership concentration and making shares more accessible to institutional investors. This increased liquidity is a catalyst for sustained price appreciation, as retail and large funds now have room to accumulate positions without driving up volatility.

Why Galderma's Undervaluation Presents a Rare Opportunity

Galderma's current share price of CHF103.40 lags behind its intrinsic value. Consider:
- Market Leadership: Galderma commands 90%+ market share in injectable aesthetics (Restylane, Dysport) and owns iconic skincare brands (Cetaphil, Differin).
- Pipeline Momentum: New therapies like Nemluvio® (atopic dermatitis) and Relfydess™ (psoriasis) are nearing approvals, targeting a global dermatology market projected to hit $35 billion by 2030.
- Financial Fortitude: With CHF791 million EBITDA in 2023 and an investment-grade balance sheet, Galderma can fund innovation without debt.

The 49.8% free float further de-risks the investment, ensuring liquidity for long-term holders. Meanwhile, the buyback at CHF97.75—below current trading levels—hints at management's belief that shares are undervalued.

The Investment Thesis: A Compelling Entry Point

Galderma's buyback and EQT's exit are not merely transactions; they're strategic moves to:
1. Leverage Undervaluation: Shares trade at 13.2x 2024E EBITDA—below peers—despite superior margins and growth visibility.
2. Unlock Liquidity: The free float increase reduces concentration risks and attracts institutional capital.
3. Fuel Growth: Treasury shares and cash reserves will fund M&A, R&D, or dividends, enhancing shareholder returns.

With dermatology's compound annual growth rate (CAGR) of 6%+ through 2030 and Galderma's unmatched portfolio, this is a rare opportunity to invest in a category leader at a discount.

Final Call to Action

Galderma's strategic buyback and EQT's exit have created a confluence of catalysts: improved liquidity, reduced dilution, and undervaluation in a booming market. For investors seeking exposure to dermatology's secular growth, Galderma offers a high-conviction entry at CHF103.40—a price that could look cheap within 12–18 months as its pipeline delivers and free float attracts new buyers.

This is not just an investment in a stock—it's a stake in the future of dermatology. The time to act is now.

Disclosures: The analysis assumes no material regulatory or competitive risks. Past performance does not guarantee future results.