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Allison Transmission seeks $522M in initial public offering

March 1, 2012

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.

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