Wilbur Ross’ IAC Auto Unit Said to Plan Share Sale This Year

Wednesday, 19 Jan 2011 03:13 PM

 

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International Automotive Components Group, the auto-parts supplier owned by billionaire Wilbur Ross, has started work to hold an initial public offering this year, two people familiar with the matter said.

IAC hired Bank of America Corp. and JPMorgan Chase & Co. and plans to file a registration statement with the U.S. Securities and Exchange Commission in the first quarter, said one of the people, who asked not to be identified because the plans are private. The offering would most likely occur in the first half of the year, said the other person.

Ross, who built his fortune buying bankrupt steel, coal and textile companies, assembled IAC through 14 takeovers starting in 2006. IAC, which makes instrument displays, door panels and headliners, had sales of about $3.2 billion in 2009 and employs 23,000 people in 15 countries. Ross, 73, didn’t respond to an e- mailed request for comment.

“I’ve wondered what his ultimate endgame is,” Don Luciani, a managing partner at Amherst Partners LLC a Birmingham, Michigan-based restructuring firm, said in an interview. “It certainly looks like he’s building an entity that profiles well for a public offering.”

Tasha Pelio, a spokeswoman at JPMorgan, and Kerrie McHugh, a Bank of America spokeswoman, declined to comment when reached by phone today.

Recent auto-related IPOs show demand for Dearborn, Michigan-based IAC’s shares may be strong, Luciani said.

Tesla, GM

Tesla Motors Inc., an electric-car startup that hasn’t reported a quarterly profit, raised $260 million in its June IPO, the first by a U.S. automaker since Ford Motor Co.’s in 1956. Tesla rose 51 percent through yesterday on the Nasdaq Stock Market, topping the Russell 1000 Index’s 21 percent gain.

General Motors Co. raised about $23.1 billion in an IPO of common and preferred shares in November after the automaker boosted its initial price target for the stock and underwriters exercised an option to buy more of the shares. GM climbed 15 percent from the offering through yesterday in New York Stock Exchange composite trading.

“Everyone’s got a sense of optimism in the wake of the GM offering,” Luciani said. “There seems to be an appetite for those kinds of issues.”

U.S. automobile sales rebounded 11 percent to 11.6 million vehicles last year from a 27-year low in 2009, according to Autodata Corp. in Woodcliff Lake, New Jersey. Sales may rise to 12.9 million vehicles this year the average of 17 analysts’ estimates compiled by Bloomberg.

Ross’ Strategy

Ross, whose net worth Forbes valued at about $1.8 billion in March, is pursuing a smaller version of the strategy that led to the creation of International Steel Group Inc., Sanjeev Varma, an analyst with Duff & Phelps Corp., said in an interview. Ross’ steel company was acquired by Mittal Steel Co. for about $4.5 billion in 2005, which was bought by Arcelor SA a year later.

Ross said in a September interview that he was seeking acquisitions in China and India for IAC’s interior-parts business.

IAC said last week it acquired the automotive assets of Multivac India Private Ltd., a supplier of interior parts, gaining the largest automaker in India as a customer. The New Delhi-based company makes interior components such as headliners, door trim and console trays for customers including Maruti Suzuki India Ltd., the nation’s biggest carmaker, as well as Volkswagen AG and Mahindra & Mahindra Ltd.

The acquisition expanded IAC’s presence into the northern part of India, the world’s second-fastest growing major economy, Jim Kamsickas, chief executive officer of IAC North America and Asia, said at the time.

The acquisition followed IAC’s November purchase of AMPRO Molding LLC, an Anniston, Alabama-based maker of parts for vehicle interiors. Terms of both transactions weren’t disclosed.

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