Clarios – the company formed when Johnson Controls sold its automotive battery business – has filed for an IPO.
The Glendale-based company is the world’s largest manufacturer of automotive batteries. Its batteries are found in one in three cars around the world. And it employs about 16,000 people worldwide, including about 500 in the Milwaukee area.
The company was bought in 2019 by Brookfield Business Partners LP, a publicly traded limited partnership, and a group of institutional investors, including the Caisse de dépôt et placement du Québec, which manages public pension plans in Quebec.
Brookfield Business Partners is a subsidiary of Brookfield Asset Management, a Canadian company with over $ 600 billion in assets under management.
The filing, announced on Wednesday, is a so-called confidential filing in which the company can refrain from disclosing financial and other information.
The number of shares to offer and the price range have not yet been determined, Clarios said in a press release.
Reuters reported that the company could be valued at more than $ 20 billion, citing a person familiar with the planning of the initial public offering.
Johnson Controls International plc sold the company for $ 13.2 billion to focus on heating, cooling, fire protection, and security products and services. These companies have higher profit margins and would have better growth prospects than those of automotive batteries.
The move has started to pay off for Johnson Controls: Its stock, which closed at $ 64.87 per share on Thursday, rose 126% in the past year.
Clarios, which manufactures more than 150 million batteries per year, has 56 manufacturing, recycling and distribution centers in more than 150 countries. The company had sales of $ 8 billion per year at the time of its sale.
The company contributed $ 390 million in earnings before interest, taxes, depreciation and amortization – a measure of profitability – to Brookfield Business Partners last year, according to a filing with the Securities and Exchange Commission.
Battery sales declined only slightly last year despite the pandemic and recovered sharply in the second half of the year, according to the filing.
The transition to electric vehicles is expected to increase demand for the advanced batteries made by the company. Batteries are needed for critical functions, such as providing power in the event of a main battery failure.
Clarios is also the world’s largest battery recycler and 99% of the material in its batteries can be recovered and reused in new batteries.