Blackstone Group prepares IPO for Gates Global

The IPO could see Gates being valued at more than $7 billion, including debt.

Sources familiar with the matter at hand have disclosed, Blackstone Group LP is exploring an IPO for Gates Global LLC.

The development comes three years after it acquired the U.S. auto parts and building products manufacturer for $5.4 billion. In order to ensure a turnaround in the company, Gates Global had to implement a significant cost cutting program which was amplified due to weak demand from the infrastructure, agriculture, mining and energy markets.

A few months back Blackstone has told investment banks that it may hire IPO underwriters to take Gates public in 2018, said three sources.

The IPO could see Gates being valued at more than $7 billion, including debt, said sources.

The sources have preferred the cover of anonymity since the deliberations are confidential.

While Gates did not immediately respond to a request for comment, Blackstone declined to comment.

Denver, Colorado-based Gates manufactures power transmission belts and fluid power products that are used in a wide range of industrial and automotive applications. As per Moody’s Investors Service Inc, its turnover for 2016 was $2.7 billion.

In 2014 after Blackstone’s acquisition of Gates, the company had struggled in its earnings with several of its industrial customers scaling back their orders. However with Blackstone’s management, the company’s business became stable through a series of cost-cutting and restructuring measures.

As per sources, Gates is expected to report a jump in earnings in 2018.

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Categories: Creativity, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy

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