ABB to spin off its Accelleron turbocharging business
Group press release | Zurich, Switzerland | 2022-07-20
ABB to spin off Accelleron and list the company on SIX Swiss Exchange
The transaction will allow both ABB and Accelleron to focus on their respective core strategies and long-term value creation for their stakeholders
ABB’s shareholders can realize the full value of Accelleron while allowing ABB to focus on its core portfolio in the areas of electrification and automation
Accelleron as the market-leader in heavy-duty turbocharging can focus on reaching its full potential in the large engine industry
Accelleron is a profitable and cash generative business targeting an attractive dividend policy
ABB shareholders to receive 1 Accelleron share for every 20 ABB shares they hold
The spin-off is subject to approval by ABB’s Extraordinary General Meeting (EGM) scheduled for September 7, 2022, and subsequent listing planned for October 3, 2022
In 2021, Accelleron generated revenues of $756 million with an operating margin of 25 percent.
Net income from continuing operations of $336 million ($7.57 per diluted share)
Adjusted operating earnings1 (non-GAAP) of $348 million ($7.84 per diluted share)
Adjusted EBITDA2 (non-GAAP) of $721 million (20% margin)
Cash provided by operating activities from continuing operations of $418 million
Free cash flow3 (non-GAAP) of $269 million
Board of directors initiated a quarterly dividend of $0.1125 per share, paid for in the third and fourth quarters for a total of $10 million
Repurchased 1,556,835 shares of our common stock for approximately $80 million in the fourth quarter, resulting in 42.6 million shares outstanding as of Dec. 31
Anyone else invested in Sylvamo? Am personally thinking of expanding my position as managment is actually quite good and delivering on results overall.
The results have been good - although I haven’t yet looked at the year end results, but I did follow some of the previous quarters.
I invested in them shortly after my post, however I reduced my position in half when it was slightly over 50 USD a share as I was slightly concerned that with losing the russian mills and market due to the invasion/war might impact significantly their long term results.
It was also around double the price of when I initially invested so it seemed like a good moment to reduce.
If it continues to fall a bit more I think I may invest more but I will need to look into the results again.
My original calculation was at a much lower price, however it also assumed a lower cash flow and a fall in the free cash flow over time… Cash generation seems to be significantly higher than I considered although I didn’t really consider capital expenditures as it was a back of the envelope calculation, I guess we would have to see predict if they can deliver it longer term?
Did they seem to be veering towards free cash flow growth or at least stability in their annual report?
“ABB announced today that it will launch a process to propose to its Annual General Meeting 2026 to decide on a 100 percent spin-off of its Robotics division. The intention is for the business to start trading as a separately listed company during the second quarter of 2026.”
Accelleron indeed performed really well, so did GE Vernova and Siemens Energy. The big name industrial spin offs have done quite well the last couple years. Are you looking at any others?
Apart from this recent ABB update, which has given me something to be really excited about for the future, at the moment, only Honeywell comes to mind as a company I occasionally check and trying to understand the game plan:
In February, Honeywell announced that its Board of Directors concluded its comprehensive portfolio review and decided to pursue a separation of its Automation and Aerospace businesses. The planned separation, coupled with the previously announced plan to spin Advanced Materials, will result in three publicly-listed industry leaders and is intended to be completed in the second half of 2026.
Fortive Corporation (FTV) has also come to my attention, although I haven’t looked into them in depth until very recently. It should happen soon and It does qualify as an industrial spin-off, so might be some potential there. Fortive itself was once a spin-off from Danaher.
“Fortive has filed a Form 10 registration statement with the SEC for the planned spin-off of its Precision Technologies segment into Ralliant, expected to be completed by the end of the second quarter of 2025.”