Medtronic Plc's diabetes business MiniMed (MMED.US) is set to spin off and go public soon, with the valuation being fiercely debated by both bulls and bears.

Medical equipment giant Medtronic Plc (MDT.US) is preparing to release its diabetes management device manufacturer, MiniMed Group Inc. (MMED.US), on the capital market. However, there is intense debate among analysts as to whether its growth prospects can support the valuation of this IPO. The California-based company plans to complete its IPO pricing on Thursday, aiming to raise up to $784 million. The company plans to further expand its insulin pump and blood glucose monitoring products to increase its coverage in the global diabetes market. According to reports on Wednesday, although MiniMed has pitched its IPO to investors at a lower valuation than its peers, the IPO subscription orders are concentrated at the lower end of the $25-28 issuance range, indicating that investors are price sensitive. Following medical protective equipment giant Medline's (MDLN.US) completion of the largest IPO in the U.S. in 2025, the market enthusiasm for medical device IPOs continues to soar. Currently, MiniMed's offering has been oversubscribed, and if its performance is strong, it is likely to spur more companies in the industry to initiate IPOs. However, the ongoing unrest in Iran this week may lead to market volatility at any time, casting uncertainty over this offering. JPMorgan analyst Robbie Marcus pointed out that if MiniMed follows the lead of its peers Insulet Corporation (PODD.US), Tandem Diabetes Care (TNDM.US), Beta Bionics (BBNX.US), etc., by promoting its automatic insulin infusion system through pharmacy channels, its revenue and profit growth will face challenges. Currently, patients mainly purchase MiniMed products through professional medical equipment suppliers. Insiders revealed that based on expected adjusted EBITDA, MiniMed's valuation will be lower than its listed peers DexCom, Inc. (DXCM.US), Insulet Corporation, and Tandem. Its core product, the MiniMed 780G system, automatically reads through continuous glucose monitoring sensors and adjusts insulin infusion to control patients' blood sugar levels. Marcus questioned the valuation corresponding to the median IPO price for MiniMed. In a client report on February 25th, he wrote, "We firmly believe that its fair valuation should be in the range of $2-3 billion, not exceeding $4 billion, while the market value corresponding to this IPO is about $7.4 billion." "The company is still in a loss-making situation and is unlikely to improve in the short term." According to the documents, in the six months ended October 24, 2024, MiniMed had revenue of $1.5 billion and a net loss of $21 million, compared to revenue of $1.3 billion and a net loss of $23 million in the same period last year. Robert W. Baird & Co. analyst Jeff Johnson believes that from a valuation perspective, the pricing range of $25-28 seems reasonable. He stated that the enterprise value/multiple of the past 12 months' revenue at this price corresponds to about 2.2-2.5 times, compared to 1.8 times for Tandem and 3 times for Beta Bionics. Aggregate data shows that the total amount raised in the U.S. healthcare-related IPOs last year reached $10.9 billion, an increase of almost two-thirds from 2024, and the listing of MiniMed will further boost the healthcare IPO market. Another analyst at the bank, David Rescott, believes that more medical technology companies going public will enhance the sector's attractiveness to investors. He said in an interview, "There aren't many healthcare IPOs recently, and new targets like MiniMed will be more popular because they provide differentiated investment opportunities." Royal Bank of Canada analyst Shagun Singh pointed out that although the timing of MiniMed's spin-off listing caught the market off guard, this move will allow Medtronic Plc to focus more on its hospital-focused equipment business. She said, "This deal is significant because the diabetes business is increasingly shifting towards the consumer end."