Cummins Inc. has announced the final exchange ratio for its split-off exchange offer allowing company shareholders to swap Cummins stock for shares that the company holds in its former filtration business, which is now a standalone company called Atmus Filtration Technologies Inc.
The Columbus-based company said Tuesday that the final exchange ratio will be 12.0298, meaning that that Cummins would distribute 12.0298 shares of Atmus stock for each share of Cummins stock that is ultimately accepted in the exchange offer.
Based on the final exchange ratio, Cummins said it is currently expecting to accept for exchange about 5.57 million shares of Cummins common stock if the exchange offer is fully subscribed. The exchange offer is currently scheduled to expire at midnight Eastern Time, at the end of the day Wednesday, unless terminated or extended.
As of noon Tuesday, Atmus stock was up 0.57% compared to the previous day’s closing price, while Cummins stock was up 0.23%, according to Yahoo Finance.
The announcement from Cummins comes about a month after the company announced that it planned to launch an exchange offer to shed its post-IPO stake in its former filtration business.
It also comes about seven months after Atmus completed an IPO, which is when a company’s stocks are sold publicly for the first time.
IPOs are generally underwritten by investment banks that arrange for the shares to be traded on a stock exchange. Atmus shares are traded on the New York Stock Exchange under the symbol ATMU.
During the IPO, about 16.24 million Atmus shares were sold, or around 19.5% of all shares. Cummins retained about 67 million shares, or a roughly 80.5% stake in the Nashville-based company.
In August 2021, Cummins unveiled plans to explore “strategic alternatives” for its filtration business, including potentially spinning it off into a separate company or selling it altogether.
The business was founded in 1958 as the Seymour Filter Co., and designs, manufactures and sells air, fuel, hydraulic and lube filtration, as well as chemical technology products for diesel and gas-powered equipment around the world, according to its website.
Atmus is headquartered in Nashville, Tennessee, and employs about 4,500 people globally. The company’s name, Atmus Filtration Technologies, is derived from “atmosphere” and “reflects its purpose of creating a better future by protecting what is important,” Cummins said.
In 2021, then-Cummins Chairman and CEO Tom Linebarger told financial analysts that the company was exploring “a range of options” for the business unit, telling financial analysts that “the business is doing great” but “we just think it can operate separately from us more effectively going forward.”
Last month, Atmus reported $1.63 billion in net sales in 2023, up about 4% from 2022, according to filings with the U.S. Securities and Exchange Commission. The Nashville-based company said the increase in sales was primarily driven by pricing increases that were partially offset by a decrease in volume.
