Ashland’s Valvoline Aims to Raise Up to $690 Million in IPO

Valvoline Inc., the maker of automotive lubricant and motor oils, aims to raise as much as $690 million in an initial public offering.

Valvoline is marketing 30 million shares for $20 to $23 apiece, according to a regulatory filing Monday. The move comes as its parent, Ashland Inc., moves to sharpen its focus on specialty chemicals.

Valvoline, which traces its roots to 1866, is the second-largest U.S. operator of oil-change stores. The company has about 1,050 branded franchised and company-owned lube store locations and sells its products to thousands of other retailers.

As much as 5 percent of the shares sold in the offering will be reserved for select Ashland employees and Valvoline Instant Oil Change store franchisees.

Ashland will hold about 85 percent of the company following the offering, according to the filing. After the 180-day lockup period, Ashland plans to spin off its remaining stake in Valvoline to shareholders in a tax-free transaction.

Immediately after the IPO, Valvoline plans to borrow about $980 million and transfer the proceeds to its parent company, according to the deal prospectus.

Valvoline posted net income of $196.1 million in the year ended Sept. 30, 2015, on sales of $1.97 billion. That compares to net income of $173.4 million on $2.04 billion in sales a year earlier.

Bank of America Corp., Citigroup Inc. and Morgan Stanley are leading the deal. The company plans to list on the New York Stock Exchange under the symbol VVV.

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