United States

A growing number of auto parts makers turn to initial public offerings


Auto suppliers are facing challenges on a number of fronts: changes in mobility and consumer preferences, electrification and new technologies, and slowing growth, to name but a few. These trends illustrate an industry in transition, and suppliers will need to examine their business models to ensure they can keep up with the changing demands and are able to sustain profitability. Among other priorities, suppliers may need to secure sufficient financing in order to succeed. For many suppliers in 2017, raising capital was often done through an initial public offering (IPO).

Few events during the life of a private company are more celebrated than the IPO. Whether the goal is to access capital markets, increase visibility and prestige, attract and reward employees, or any one of a number of other objectives, the IPO signals a coming of age for many companies.

Significant offerings and acquisitions

While the IPO market has been somewhat tepid for the automotive industry in recent years, 2017 signaled a 70 percent uptick in global automotive supplier IPO volume.1 There were a number of notable offerings and acquisitions, including:

  • Denver-based auto parts maker Gates Industrial Corp., which manufactures power transmission belts and fluid power products, filed its IPO in December. Parent company Blackstone, which acquired Gates in 2014, will retain a majority of voting power.2 Blackstone reportedly could value the IPO by as much as $9 billion, although it is not clear if that includes the company’s nearly $300 million in debt.3 Gates employs some 14,000 people in 30 countries.
  • Auto dealers also saw CarGuru, an online network of more than 40,000 dealers, raise more than $150 million after pricing its IPO at $16. By the beginning of 2018, the company was trading at $29.98.4
  • European-based suppliers such as Pirelli (tires), Voltabox (battery systems), Jost (truck components) and Gestamp (body and structural parts) offered newly issued shares or existing shares through IPOs.
  • The Icahn Automotive Group, which owns Pep Boys, Auto Plus, Just Brakes and Precision Tune Auto Care, continued to grow its list of holdings with the acquisition of Aamco in October. It has been reported that parent company Icahn Enterprises plans to take Icahn Automotive public.5

The decision to go public

The volatile IPO window can open or close with little notice. While markets move quickly, the IPO process requires significant lead time. So it is critical for companies considering an IPO to make a thorough assessment of what steps need to be taken and then develop a plan to tackle key items.

1Global Automotive Supplier Study 2018 (Dec. 2017) Lazard and Roland Berger.
2M. Mendoza, “Denver-based Gates files for IPO” (Jan. 2, 2018) Denver Business Journal.
3A. Al-Mulsim, “Auto-Parts Maker Gates Industrial Files for IPO” (Dec. 27, 2017) The Wall Street Journal.
4S. Mitra, “Billion-Dollar Unicorns: CarGurus Bootstraps Its Way To An IPO” (Jan. 2, 2018) SeekingAlpha.com.
5C. Schultz, “Auto parts IPO from Icahn?” (Oct. 4, 2017) SeekingAlpha.com.

You may also be interested in

Automotive trends to watch in 2018

Automotive trends to watch in 2018

The road ahead looks promising, but there are a number of areas that will require careful navigation by auto manufacturers and suppliers.

Auto trends

Auto trends

Auto Trends offers insights on the global automotive industry to help suppliers and OEMs grow and prepare for challenges on the horizon.


Manufacturing Insights

Get the manufacturing insights you want right in your inbox.

(* = Required fields)


Lawrence Keyler
Global Automotive Sector Leader



RSM Automotive Monitor Survey

Case Studies

Events and Webcasts

Manufacturing Insights
News, trends and insights for manufacturing and distribution executives.