IBJNews

Remy International considering stock offering, CEO says

Back to TopCommentsE-mailPrintBookmark and Share

Pendleton-based Remy International Inc., the former General Motors Co. unit that exited bankruptcy in 2007, is considering a public offering of its stock this year, CEO John Weber says.

A stock sale is one financing option for the maker of alternators, starters and electric motors for hybrid cars, Weber said. Other options include a merger or an acquisition, he said. Remy shares now trade on the over-the-counter market. Sales are growing and the company is profitable, so Remy is looking for money to invest in strategic growth, he said.

“One of the alternatives we’re considering is an IPO, and part of the driver for that is that there are several strategic opportunities, both domestic and around the world, that we think would be a very good use of investors’ money,” Weber said. He declined to say on which exchange the shares may trade.

Remy may be among several auto-industry offerings this year. Chrysler Group LLC is planning to go public in the second half of this year. Billionaire Wilbur Ross’s International Automotive Components Group has hired banks for a 2011 share sale, a person familiar with the plan has said. Tesla Motors Inc. and GM last year held the first offerings by a U.S. automaker since 1956.

The automakers and suppliers are tapping into investor enthusiasm for the industry’s profitable growth after the worst economic downturn since the Great Depression. Ford earned $6.37 billion in the first three quarters of 2010, the most since 1998.

Remy had been among the auto suppliers expected to consider selling stock this year, Justin Mirro, managing director of Moelis & Co., a New York-based investment bank, said.

“The companies that would benefit most from an auto industry IPO would be those with hybrid technology, faster growth technologies, fuel economy, lightweight materials or those with a true global platform,” he said.

U.S. automobile sales increased 11 percent last year, to 11.6 million vehicles, from a 27-year low in 2009, Autodata Corp. said Jan. 4. Sales may rise to 12.9 million vehicles this year, according to the average of 17 analysts’ estimates compiled by Bloomberg earlier this month, 23 percent fewer than the 16.8 million annual average from 2000 through 2007.

Remy, which makes parts for light- and heavy-duty vehicles as well as replacement parts, said net income was $13.8 million in the three months ended Sept. 30, compared with $2.6 million a year earlier, which excluded a one-time gain. Sales rose 25 percent, to $280 million. Remy plans to report fourth-quarter results March 17, Weber said.

Fidelity National Financial Inc., the largest U.S. title insurer, is Remy’s largest shareholder, with a 47-percent ownership stake, according to a statement. Remy  had about 10.6 million shares outstanding as of Sept. 30, and the average daily volume in the last three months is 2,967 shares.

After a rights offering that closed Jan. 18, Remy will have about 31.6 million shares outstanding. Daniel Murphy, Fidelity National’s treasurer, didn’t respond to an e-mail and voicemail seeking comment.

Through September, Remy received about 61 percent of its revenue from the U.S., the rest from countries including China, Brazil, South Korea and the U.K.

Remy is considering acquisitions in all countries where it operates and in either its aftermarket or original-equipment parts business units, Weber said. He declined to give a limit for how much Remy might spend on an acquisition.

“We’re willing to take on debt and raise additional equity for the right transaction,” he said.

Formerly known as Delco Remy, the company traces its roots to brothers Frank and Perry Remy, who developed magnetos, generators that used magnets to help start early automobiles. GM acquired Delco Remy in 1918 and spun it off in 1995. Remy changed its name to Remy International in 2004 and spent less than two months in bankruptcy in 2007.

Last year, the company refinanced its debt and started the process of eliminating its preferred class of shares.

“It’s a perfect position for the company for everything from acquisition to alliances to a registration,” Weber said. “It puts us in a perfect position to evaluate options.”
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
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
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

  2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

  3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

  4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............

ADVERTISEMENT