Cummins Files for Possible IPO of Filtration Business
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Cummins Inc. announced its filtration business confidentially submitted a draft registration statement with the U.S. Securities and Exchange Commission for a proposed underwritten initial public offering in the United States.
Columbus, Ind.-based Cummins reported the number of shares to be offered and the price range for the IPO have not yet been determined. The IPO is expected to commence after the completion of the SEC review process, subject to market and other conditions.
In August, Cummins reported it was exploring what it called “strategic alternatives” for its filtration business unit, which it launched in 1958. The division notched annual sales of $1.2 billion in 2020.
Chairman and CEO Tom Linebarger said in the Q2 release the filtration business had improved its financial and operational performance over the past few years.
“The challenge is, looking forward, the opportunities to grow shareholder value look primarily to us to be in diversification,” he said. “The number of [filter] technology innovations for the truck business or for our [other] end markets look like they are limited in front of us.”
But there remain opportunities to take that technology platform and global footprint to other filtration segments, and those look significant, he said.
“What is clear is the filtration segment has come to a size and performance level now where we think it can stand on its own, or it could be part of another bigger company that plans more diversification in other end markets,” Linebarger said.
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He said Cummins was exploring everything from a sale to a spinoff or another kind of strategic option in an effort to realize value for Cummins’ shareholders.
“We know that when we are the best owner and can make the most of the assets, we are going to do that,” Linebarger said. “And when we are no longer the best owner, then we need to confront that, too. That’s what we are trying to do here.” — Transport Topics