IPO Watch: Valvoline Revs Up For Debut Following Split From Parent Ashland

(RTTNews) - Valvoline, a provider of motor oil and automotive lubricants, has filed for an initial public offering of its common stock. The company's IPO is part of its parent company Ashland Inc.'s (ASH) reorganization.

Covington, Kentucky-based Ashland said in September 2015 that that it plans to separate into two independent, publicly traded companies. The new Ashland Global Holdings will be a premier specialty chemicals company, while Valvoline will be an engine and automotive maintenance business.

Ashland said Tuesday that Valvoline has filed a registration statement with the Securities and Exchange Commission for an initial public offering of up to 20 percent of its common stock.

Ashland plans to complete the IPO during the fourth quarter of calendar year 2016. The company currently expects to distribute the remaining common stock of Valvoline to Ashland's shareholders upon expiration of the IPO lock-up, typically six months after completion of the IPO.

In connection with the separation, Ashland will seek shareholder approval to reorganize itself under a new public holding company. This reorganization will enable Ashland to reincorporate in the State of Delaware and help facilitate a tax-efficient separation.

Valvoline is the first trademarked motor oil in U.S. history. The company's history dates back to 1866.

In a preliminary filing with the SEC, Valvoline said it would raise up to $100 million in the IPO, a figure used to calculate filing fees. The Lexington, Kentucky-based company plans to list its shares on the New York Stock Exchange under the ticker "VVV".

Bank of America Merill Lynch, Citigroup and Morgan Stanley are acting as joint book-running managers to the offering.

In the U.S. and Canada, Valvoline's products are sold to consumers through over 30,000 retail outlets, to installer customers with over 12,000 locations, and to about 1,050 Valvoline branded franchised and company-owned stores.

In fiscal 2015, the company recorded net income of $196 million on $1.97 billion in sales. This compared to net income of $173.4 million on $2.04 billion in sales in the prior year.