Cummins Spinoff Atmus Rises in Debut After $275 Million IPO
Cummins Inc.’s spinoff Atmus Co. rose in its trading debut after raising $275 million in an initial public offering.
Atmus, a maker of powertrain components for commercial vehicles, sold 25 million shares for $11 each, according to a statement. The company had marketed the shares for $10 to $12 apiece.
The IPO is the latest in a string of spinoffs from Cummins, the world’s largest independent maker of diesel engines. The Columbus, Indiana-based company has been selling off non-core businesses to focus on its core engine and powertrain operations.
Background of Atmus
Atmus was founded in 2019 as a wholly owned subsidiary of Cummins. It is a global supplier of powertrain components for commercial vehicles, including transmissions, axles, and drivetrain components.
Atmus has operations in the U.S., Europe, and Asia, and its products are used in a variety of commercial vehicles, including buses, trucks, and recreational vehicles.
The company has more than 1,000 employees and reported revenue of $1.2 billion in 2020.
Cummins’ Spinoff Strategy
Cummins has been spinning off non-core businesses since 2018, when it sold its engine-components business to a private-equity firm.
Since then, the company has sold off its turbocharger business, its filtration business, and its exhaust-systems business.
The spinoffs have allowed Cummins to focus on its core engine and powertrain operations, which have been the company’s main source of revenue for decades.
The spinoffs have also allowed Cummins to raise money to invest in new technologies and expand its operations.
Atmus’ IPO
Atmus’ IPO is the latest in a string of spinoffs from Cummins. The company raised $275 million in the offering, which was priced at the high end of its expected range.
The proceeds from the offering will be used to pay down debt and for general corporate purposes.
Atmus’ shares rose as much as 8.3% in their trading debut on the Nasdaq Global Select Market. The stock closed at $11.90, up 8.2% from its IPO price.
Atmus’ Prospects
Atmus is well-positioned to capitalize on the growing demand for commercial vehicles. The company’s products are used in a variety of commercial vehicles, including buses, trucks, and recreational vehicles.
Atmus is also well-positioned to benefit from the increasing demand for electric vehicles. The company’s powertrain components are used in electric vehicles, and the company is investing in new technologies to capitalize on the growing demand for electric vehicles.
Investor Reaction
Investors have reacted positively to Atmus’ IPO. The stock rose in its trading debut, and analysts are bullish on the company’s prospects.
Analysts at Goldman Sachs Group Inc. and Bank of America Corp. have both given the stock a “buy” rating, citing the company’s strong position in the commercial vehicle market and its potential to benefit from the increasing demand for electric vehicles.
Conclusion
Atmus Co., the spinoff of Cummins Inc., rose in its trading debut after raising $275 million in an initial public offering. The company is a global supplier of powertrain components for commercial vehicles, and its products are used in a variety of commercial vehicles, including buses, trucks, and recreational vehicles. The proceeds from the offering will be used to pay down debt and for general corporate purposes. Investors have reacted positively to Atmus’ IPO, and analysts are bullish on the company’s prospects. Atmus is well-positioned to capitalize on the growing demand for commercial vehicles and electric vehicles.