Tag Archive | "IPO"

Ally ‘Highly Confident’ About Overcoming Boot From GM Leasing Program

DETROIT — Just days before it named Jeffrey Brown as its new CEO, Ally Financial’s then-CEO Michael Carpenter expressed surprise at a move by General Motors to put 100% of its U.S. Buick, Cadillac and GMC lease incentives in the hands of its captive, GM Financial.

“While we were not surprised by the idea of GM growing their captive, we were surprised that they would exclude any competition in the lease space, where Ally has done such a great job for them over the last several years,” Carpenter said during a quarterly earnings call last week. “And frankly, we don’t see how auto sales are increased by having less, otherwise known as no, options for consumers and dealers.”

In early January, General Motors announced that it planned to use GM Financial as the exclusive provider of subsidized leases in the United States, edging out both Ally and U.S. Bank from its lucrative subsidized leasing business.

“This will absolutely not impact our strong relationships and commitment to GM dealers and we will continue to support the channel,” Carpenter added.

The former CEO went on to say that once the company frees up capital from the subvented GM leasing business, it can “redeploy profitably in these other areas and increase share.” Those other areas, according to Carpenter, include the used-car market, franchised dealers and OEMs.

“For example, even though we’re doing well and we have 4% share of the 10,000 non-GM/Chrysler relationships we have, over 6,500 of those do a very modest level of business with us today,” he noted. “And we believe we can increase that penetration with those dealers over the near term.

“We will also continue to have conversations with other auto makers to see how Ally can drive more value in their channels. And these OEMs are a lot more interested in talking to Ally now that we’re out of the TARP, than they were before.”

During the call, officials reported a fourth quarter net income of $177 million, compared to $104 million in the fourth quarter 2013. For all of 2014, the finance source saw a net income of $1.2 billion, up from $361 million in 2013.

The increases were driven in part by results from Ally’s dealer-financial services business, which was headed up by Ally Financial’s new CEO, Jeffrey Brown. The group increased pre-tax income by 45% compared to the prior-year period, but that increase was due, in part, to a $98 million fine levied against Ally in the fourth quarter of 2013 by the Consumer Financial Protection Bureau and U.S. Department of Justice.

“Obviously, the year-over-year delta is impacted by the $98 million CFPB charge we took last year,” noted CFO Christopher Halmy during the call.

Ally’s auto finance franchise business remained strong during the quarter, with earning assets for the business up 3% year-over-year. Consumer auto financing originations for the quarter increased, and originations for the year hit $41 billion, the highest full-year total since 2007.

“The originations in the quarter were $9 billion, which we feel good about given the seasonal nature of the business,” Carpenter said. “These origination levels were driven by strong performance across multiple channels and were higher in every product year over year with the exception of subvented loans.”

New and used originations from non-GM/Chrysler dealers improved 37% compared to the prior-year period and increased 45% for the full year. The non-GM/Chrysler business now accounts for 22% of total consumer originations. Excluding originations from recreational vehicles, non-GM/Chrysler originations increased approximately 50% in the past year.

The finance source’s successes during the quarter and in 2014 as a whole had Carpenter “highly confident” that Ally will overcome being dropped from GM’s leasing program.

“… We have a range of options to handle these shifts in our business, which occur with some regularity,” he said. “And while the specifics may be a surprise of direction, we’ve dealt with this over five years. We have a battle-tested team. We’ve shown what we can do. We view this as another opportunity to evolve that business and we remain optimistic about the future potential, and we are committed to the plan that we showed investors at the time of the IPO.”

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Fiat Chrysler CEO Sees Ferrari IPO Mid 2015

The initial public offering of luxury carmaker Ferrari is expected to happen between the second and the third quarter of 2015, the chief executive of parent Fiat Chrysler Automobiles (FCA) said on Tuesday, reported Reuters.

FCA CEO Sergio Marchionne said last month he would spin off Ferrari from the group, sell a 10 percent stake via a public offering and distribute the rest of FCA’s stake in the luxury sports car brand to its shareholders.

The spin-off is part of a bigger capital-raising plan that also includes a $2.5 billion convertible bond issue to help cut debt and fund an ambitious business plan at the world’s seventh-largest carmaker.

Marchionne said on Tuesday that after the capital raising the free float of FCA, which moved its primary listing to New York last month, could increase to around 20 percent of the group’s capital. A roadshow to market the capital raising with U.S. investors is planned for December, he added

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Treasury Plans to Sell Additional Ally Common Stock

WASHINGTON — Last week, the U.S. Department of the Treasury announced that it would continue to wind down its investment in Ally Financial by selling additional shares of common stock through its first pre-defined written trading plan. The Treasury currently holds 75,065,340 shares, or approximately 16% of Ally common stock.

“Treasury’s sale of additional Ally common stock is part of our continuing effort to wind down the Troubled Asset Relief Program (TARP),” said Chief Investment Officer Charmian Uy. “We will prudently exit the remaining Ally investment, balancing speed with maximizing returns for taxpayers.”

As part of Ally’s initial public offering in April, the Treasury sold 95,000,000 shares of Ally common stock at $25.00 per share for $2.375 billion dollars in proceeds to taxpayers. The underwriters of the IPO later exercised their option to purchase 7,245,670 additional shares at the IPO price, recovering an additional $181 million for taxpayers. Taxpayers have now recovered approximately $17.8 billion on the Ally investment, roughly $650 million more than the original $17.2 billion investment.

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TrueCar Announces Pricing of Initial Public Offering

SANTA MONICA, Calif. — Last week, TrueCar announced the pricing of its initial public offering of 7,775,000 shares of its common stock at a price to the public of $9 per share.

The shares began trading on the NASDAQ Global Select Market on May 16 under the symbol “TRUE.” In addition, TrueCar granted the underwriters a 30-day option to purchase up to 1,166,250 additional shares of common stock from TrueCar at the initial public offering price. The offering is expected to close on May 21, 2014, subject to customary closing conditions.

Goldman, Sachs & Co. and J.P. Morgan Securities LLC are acting as joint book-running managers for the offering. RBC Capital Markets LLC is also acting as a book-running manager. Cowen and Company LLC and JMP Securities LLC are acting as co-managers.

A registration statement relating to these securities has been filed with, and declared effective by, the Securities and Exchange Commission.

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TrueCar Raises $70 Million in U.S. IPO

Via Bloomberg

TrueCar Inc., the auto-buying website, raised $70 million in its initial public offering, pricing the shares below the marketed range.

TrueCar, which provides pricing and vehicle data for consumers and helps car dealers find customers, sold 7.78 million shares for $9 each, according to data compiled by Bloomberg, after offering them for $12 to $14 apiece.

About 3.2 percent of new vehicle sales in the U.S. were handled by TrueCar in the first quarter, the company estimates. TrueCar’s revenue, which jumped 75 percent in the three months through March, comes from fees paid by dealers participating in its network, according to the filing. The company remains unprofitable, the filing shows.

At the IPO price, Santa Monica, California-based TrueCar would have a market value of $639 million, based on 71 million shares outstanding after the offering, according to the original terms of the prospectus.

TrueCar named John Krafcik, the former head of Hyundai Motor Co.’s U.S. operations, as president this month. The company was started in 2005 by Scott Painter, who also founded CarsDirect.com and was an early adviser to electric-car maker Tesla Motors Inc.

TrueCar plans to list on the Nasdaq Stock Market under the symbol TRUE. Goldman Sachs Group Inc., JPMorgan Chase & Co. and RBC Capital Markets managed the TrueCar IPO.

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TrueCar Files to Raise $125 Million in IPO

(Bloomberg) – TrueCar Inc., the online auto-shopping service backed by Microsoft Corp. co-founder Paul Allen, filed to raise $125 million in a U.S. initial public offering.

The figure is a placeholder used to calculate fees and may change. TrueCar, based in Santa Monica, Calif., plans to use the net proceeds from the offering primarily for general corporate purposes, including working capital, operating expenses and capital expenditures, according to a filing with U.S. Securities and Exchange Commission.

TrueCar, led by CEO Scott Painter, plans to sell stock after U.S. automakers reported their best March sales pace in seven years, putting the annualized rate, adjusted for seasonal trends, at 16.4 million from 15.3 million a year earlier. Founded in 2005, TrueCar helps consumers purchase vehicles using information gleaned from more than 7,000 dealerships, the filing showed.

“As a business we are excited to be in a place where we can really innovate,” Painter said in an interview. “This is what you should infer from folks like Paul Allen validating and investing in the company, from people like John Krafcik being associated with the company.”

TrueCar reported a 68% jump in revenue in 2013 to $134 million, while its net loss narrowed to $25.1 million from $74.5 million, according to the filing.

Vulcan Stake
About 3% of new vehicle sales were handled through TrueCar, which funnels interested buyers to car dealers. The company gets $300 from dealers for each customer it refers who buys a new vehicle, and $400 for each used car sale it arranges, Painter said.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. will lead the offering. The company plans to list on the Nasdaq Stock Market under the ticker TRUE.

Vulcan Capital, a private-equity firm headed by billionaire Allen, owns a 9% stake in the company. Painter owns 12%. TrueCar raised $200 million in September 2011 to fund acquisitions, Painter said at the time.

The company added Krafcik, former head of Hyundai Motor Co.’s U.S. operations, to its board in February. TrueCar announced the appointment in a statement.

Separately, TrueCar said that the U.S. Federal Trade Commission’s Bureau of Competition is conducting an investigation to determine whether auto dealers that refuse to work with the company have violated parts of the Federal Trade Commission Act. The company said it’s complying with an FTC request to provide documents and information.

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