Wilbur Ross plans to take International Automotive Components Group public this year and hired Bank of America Corp. and JPMorgan Chase & Co. to run the process, two people familiar with the matter told Reuters on Wednesday. IAC is a global supplier of automotive components and systems.
* Bank of America, JPM to underwrite IAC IPO-sources
(Reuters) – Billionaire investor Wilbur Ross plans to take International Automotive Components Group (IAC) public this year and has hired Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) and JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) to run the process, two people familiar with the matter said on Wednesday.
Ross, known for consolidating out-of-favor assets in areas such as autos, steel and coal, has built IAC into an auto interiors supplier with revenue of $5 billion, in part by combining the business of the former Collins & Aikman and the interiors business of Lear Corp.
The initial public offering comes at a time when the global auto industry shows signs of accelerating a recovery that began last year. U.S. auto sales are expected to rise 12 percent to about 12.9 million vehicles in 2011, according to industry forecasting firm J.D. Power & Associates.
IAC was not profitable in 2009 when the auto industry was pushed to the brink of collapse. Ross told Reuters last year that he expected the business to turn profitable in 2010.
The planned IPO of IAC would follow General Motors Co’s (GM.N: Quote, Profile, Research, Stock Buzz) $23.1 billion IPO in November. IAC is among a number of auto sector companies expected to go public this year, such as Chrysler Group LLC and parts supplier Delphi.
The estimated size of the offering could not be learned on Wednesday.
Representatives for Bank of America and JPMorgan declined to comment.
Ross was not immediately available for comment but he told Reuters earlier this month that he was planning more expansion for the auto supplier business and had no plans to exit the industry. [ID:nN11142932]
The company makes various auto interior parts such as door and trim systems, instrument panels, floors and headliner systems. Its major competitors in the area include Johnson Controls (JCI.N: Quote, Profile, Research, Stock Buzz), Magna International (MG.TO: Quote, Profile, Research, Stock Buzz) and Visteon Corp VSTO.OB.
The robust demand seen in the GM offering underscores growing investor confidence the auto industry has come through the punishing downturn of the past years with sharply lower costs and higher profit potential, and bodes well for upcoming auto industry IPOs, analysts and bankers have said.
Shares of GM have risen 13.3 percent since its debut on the New York Stock Exchange in November.
By Soyoung Kim and Clare Baldwin
(Editing by Robert MacMillan, Gerald E. McCormick and Carol Bishopric)