Clarios pulls $1.7 billion IPO at last minute citing market volatility

Clarios pulls $1.7 billion IPO at last minute citing market volatility

Clarios pulls $1.7 billion IPO at last minute citing market volatility 150 150 Batteries International

July 29, 2021: Clarios International, the world’s largest manufacturer of automotive batteries, has announced today (Thursday) that it had pulled its long-awaited initial public offering that had been predicted in the market to raise some $1.7 billion.

In a public statement issued this morning, Clarios said market volatility had provoked this move. The cancellation coincides with a fall in momentum of this year’s record spree of IPOs in the US.

Since the end of January this year, 690 companies have raised more than $229 billion in IPO listings, according to Bloomberg, the news agency.

In an email sent to BESB by Clarios, the firm said: “While we are looking forward to taking Clarios public and providing investors with exposure to our market-leading advanced energy storage solutions platform, we have elected to defer the IPO given current market conditions.

“We received positive feedback through the marketing process and are committed to keeping the market informed as we reassess the environment over the coming months.

“As the largest low-voltage battery manufacturer in the world, Clarios is well positioned to satisfy the evolving needs of the vehicles of the future and we are confident in our long-term growth prospects and the market opportunity ahead.”

Clarios had said it intended to use the proceeds received from the IPO to pay down debt.

The last two financial years have not been positive for the battery giant. The company recorded a net loss of $399 million on net sales of $7.6 billion for the year ended September 30, 2020. The previous year it recorded net income of $25 million on sales of $8.53 billion.

Some 509.1 million shares were likely to be outstanding after the IPO. The control of the shares would still be owned by Brookfield Business Partners and Caisse de dépôt et placement du Québec and others that acquired Clarios in May 2019 for $13.2 billion.

The pulling of the IPO came as a surprise to investors and the market alike. Just the week before, Clarios had announced the launch of its marketing exercise known as the roadshow for its initial public offering of 88,080,495 shares of its common stock and 10,000,000 shares of its series A mandatory convertible preferred stock.