GIC to invest US$250M in EV battery-maker Clarios IPO

U.S. one-dollar currency notes; taken September 2018.U.S. one-dollar currency notes; taken September 2018.

Singapore’s sovereign wealth fund GIC will invest US$250 million of electric-vehicle (EV) battery maker Clarios International at the initial public offering (IPO) price, the company said in a press release Tuesday.

Clarios’ sponsors, Brookfield Business Partners LP, Caisse de dépôt et placement du Québec (CDPQ) and others, have indicated they would buy up to around 26.32 million shares at par with the underwriters’ pricing, or an amount up to US$500 million, the statement said. CDPQ manages several large Quebec-based public and para-public pension and insurance plans.

The IPO on the New York Stock Exchange is expected to price between US$17 and US$21 a share, the statement said.

Assuming an IPO price of US$19 a share, the range’s midpoint, the offering would raise around US$1.62 billion, or around US$1.86 billion if the underwriters exercise their overallotment option, according to Clarios’ prospectus.

GIC would acquire around 13.16 million shares, if the IPO prices at US$19, according to the prospectus; the shares are subject to a 180-day lockup period.

The total number of common shares to be outstanding after the IPO will be 509.09 million, or 522.31 million if underwriters exercise their over-allotment option, the prospectus said.

Entities affiliated with the sponsor are expected to hold 80.1 percent of the company after the offering, if the over-allotment option isn’t exercised, the prospectus said. In addition to CDPQ and Brookfield Business Partners, the sponsors include Panther Sub-Holdings (Bermuda IX), BCP V AIV I LLC, Current Aggregator 1 LP and Current Aggregator 2 LP, the filing showed.

Clarios’ products incudes starting, lighting and ignition batteries (SLI) and advanced battery technologies, which include enhanced flooded batteries (EFB) and absorbent glass mat batteries (AGM).  The products are distributed mainly via aftermarket and OEM channels.

“We have established one of the world’s most successful examples of a circular economy. We design, manufacture, transport, recycle and recover the materials in vehicle batteries using a closed-loop system. Our batteries are designed so that up to 99 percent of the materials can be responsibly recovered, recycled and repurposed directly into new batteries,” the company said in the prospectus.

For nine months ended 30 June, the company posted net sales of US$6.56 billion, up from US$5.43 billion in the year-ago period; it reported total adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of US$1.25 billion for the nine-month period, up from US$883 million in the year-ago period.