Allison Transmission seeks $522M in initial public offering

Back to TopCommentsE-mailPrintBookmark and Share

Allison Transmission Holdings Inc., the former parts unit of General Motors Co., is seeking to raise as much as $522 million for its private-equity owners in a U.S. initial public offering.

The Indianapolis-based company is offering 21.7 million shares for $22 to $24 apiece on behalf of Carlyle Group and Onex Corp., according to a filing Wednesday with the U.S. Securities and Exchange Commission, and won’t receive any proceeds. Allison filed with the SEC initially last March for a $750 million IPO.

Allison is one of at least seven companies that have scheduled U.S. IPOs in the next month after the Standard & Poor’s 500 Index reached its highest level since 2008, signaling that improving economic prospects have stoked investor appetite. The offering is expected to price during the week of March 12, according to data compiled by Bloomberg.

The midpoint of the price range would value Allison common stock at about $4.2 billion, the filing shows. The company has about $3.4 billion of debt. Washington, D.C.-based Carlyle and Onex of Toronto bought Allison from General Motors for $5.6 billion in 2007. Carlyle and Onex are trimming their respective stakes in Allison to 44 percent from 50 percent.

Sales at the maker of automatic transmissions for highway trucks, military vehicles and mining equipment increased 12 percent, to $2.2 billion, in the year ended Dec. 31, while net income more than tripled to $103 million, according to the prospectus.

The company plans to list its shares on the New York Stock Exchange under the symbol ALSN. Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. are leading the offering.

Allison dominates the U.S. market in the sale of automatic transmissions in categories such as firetrucks, school buses and garbage trucks.

Last April, the company said it planned to invest $89 million to grow its headquarters and manufacturing operations in Speedway, creating as many as 205 jobs by 2013. The company has about 2,500 employees in Indianapolis.

The company was founded in 1915 by Jim Allison, one of the original four founders of the Indianapolis Motor Speedway.


  • Disagree
    BttB90, my apologies, my initial comment came off as rude, and I was only intending to be sarcastic, but not offensive.

    I disagree completely. In the case of Chrysler and GM, you saw a steady degredation of their financials over a long period of time. I do agree that a drastic part of the decline you saw was that they simply paid their workers too much and the benefit costs were far too high. The pension and other continuing benefits was the straw that broke the camel's back. In the case of GM and Chrysler, they were competing in a market with significantly more players that the number of players in the automatic transmission manufacturing market. The barriers to entry are significantly higher and their are fewer (or nonexistant) competitors. With high barriers to entry, a unique product offering, long-term customer relationships, and few direct competitors, how could you expect the business to suddenly succumb to high labor costs and teeter on the brink of bankruptcy? It just isn't going to happen. Unlike Chrysler and GM, Allison's financials have continued to strengthen, all while using a significant majority of their free cash flow to pay down debt at an extraordinary rate. You can also see their payroll and benefit costs have been significantly reducing as older UAW members retire. I think you need to do a more thorough review of the company's financials rather than making broad generalized comments that clearly have no basis. If you don't like the UAW or unions in general, Allison shouldn't be the target of your baseless, and quite frankly, very incorrect, remarks.
  • Great Insight is Narrow Sighted
    Just as with GM and Chrystler the initial margins look good but with the curve soaring upwards with the high cost of union labor it will soon pass the profit curve and rely on either government handouts or lossess that will be directly born by the stockholders. The only way for long term success is to become inependant of the unions.
    • Great Insight
      BttB90 clearly knows what he is talking about, and everyone should listen to his sound financial advice. Last year, in a dismal economy, this company only managed to increase it's sales by 12%, which were clearly their highest margin products, because net income tripled from the prior year. In four years the business shed almost 40% of the debt used to buy the business from GM. Keep in mind this was during the worst recession many of us have experienced. The proposed IPO would further reduce the remaining debt by at least 15%. Oh, and I can tell a lot of analysis went into BttB90's analysis of profits by segment to use government business as a cornerstone of his argument. Clearly this is an awful investment option for potential investors. Or, BttB90 is an idiot. Take your pick.
      • Allison and Investment
        Isnt it hard to seriously invest in a company that has so much debt, military spending is being cut, and is bound by the whims and desires of the UAW and other unions. Bad investment when the government can bail out the unions and leave the stockholders high and dry. Smells like a GM patterned business venture.

        Post a comment to this story

        We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
        You are legally responsible for what you post and your anonymity is not guaranteed.
        Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
        No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
        We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

        Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

        Sponsored by

        facebook - twitter on Facebook & Twitter

        Follow on TwitterFollow IBJ on Facebook:
        Follow on TwitterFollow IBJ's Tweets on these topics:
        Subscribe to IBJ
        1. Angela IS the best RD

        2. We are a nation of speed. All of our younger lives are filled with deadlines, quotas and bottom lines. We start to ease out of the pressured rat-race when we finally see "retirement." The most enjoyable travel on the planet is passenger rail service. Indy to Chicago does not beat Megabus or Southwest Airlines in speed. Passenger rail however has the best seating, mammoth legroon, seat backs that recline to more than 45 degrees and employers that really want you to return as a customer. Indiana municipalities need to maintain subsidies to support this transportation mode. Losing it is loss for all of us.

        3. Good day! I just want to testify how i got my loan from Mr. Eric Lefkofsky after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan. Until a friend of mine introduce me to this popular Mr. Eric Lefkofsky who promised to help me and indeed he did as he promised without any form of delay. I never thought there are still reliable loan lenders until i met Mr. Eric lefkofsky who indeed helped me with the loan and changed my belief. I promised to share this testimony after I got my loan. I don't know if you are in any way in need of a genuine and urgent loan,free feel to contact Mr. Eric Lefkofsky via their email{grouponfunding@hotmail.com}

        4. Its a THUG issue. Bleecker Street and NYX are thug bars. They attract thugs of all races. Places that attract thugs need to be kicked out of Broad Ripple. Ain't nobody got time for that!

        5. Hello everyone, My name is Marian Gareth, I am from the Texas, United State, am here to testify of how i got my loan from Mr Andre Frank {frankloancompany@yahoo.com} after i applied Two times from various loan lenders who claimed to be lenders right in this forum,i thought their lending where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr Andre Frank the C.E.O of Andre Frank Loan Company who promised to help me with a loan of my desire and he really did as he promised without any form of delay, I never thought there are still reliable loan lenders until i met Mr Andre Frank, who really help me with my loan and changed my lief for better. I don't know if you are in need of an urgent loan, free feel to contact Mr Andre Frank on his email{ Frankloancompany@yahoo.com} for help