Allison Transmission Holdings, which manufactures fully-automatic transmissions for commercial, military and transit vehicles, announced terms for its IPO on Wednesday. The Indianapolis, IN-based company plans to offer 21.7 million shares at a price range of $22.00 to $24.00 for a deal size of approximately $500 million. At the midpoint of the proposed range, Allison Transmission would command a market value of $4.3 billion.
All of the shares being offered belong to private equity firms The Carlyle Group (CG) and Onex Corporation, and Allison Transmission will not receive any proceeds. The two firms acquired Allison Transmission in 2007 will each continue to hold 43% of shares after the offering.
In 2011, despite decreases in military and municipal spending, sales increased 12% to $2.2 billion and gross margin rose to 44%. Net income improved from $30 million to $103 million.
Allison Transmission, which was founded in 1915 and booked $2.2 billion in sales in 2011, plans to list on the NYSE under the symbol ALSN. BofA Merrill Lynch, Citi and J.P. Morgan are the lead underwriters on the deal.
