Photographer: Michael Nagle/Bloomberg
markets

Blackstone's Gates Industrial Climbs in Debut After U.S. IPO

Updated on
  • Auto-parts maker raised $731.5 million in IPO on Wednesday
  • Gates plans to use proceeds of sale to pay down debt

Gates Industrial Corp., the transmission belt and industrial equipment maker owned by Blackstone Group LP, climbed in its trading debut after pricing shares toward the bottom of their marketed range.

Gates rose as much as 1.8 percent to $19.35 in New York trading Thursday. It raised $731.5 million by selling 38.5 million shares for $19 apiece on Wednesday, according to data compiled by Bloomberg. Gates intends to use the proceeds to pay down debt.

The company has a market valuation of about $5.5 billion.

Blackstone acquired the company from Onex Corp. and Canada Pension Plan Investment Board for $5.4 billion in 2014. The firm will own about 86 percent of the shares and continue to have a majority of the voting rights after the offering.

Gates posted net income of $84 million on net sales of $2.7 billion in its fiscal 2016, according to regulatory filings. That compares to $51 million in net income on $2.7 billion in sales a year earlier.

Citigroup Inc., Morgan Stanley and UBS Group AG led the offering. The stock trades on the New York Stock Exchange under the symbol GTES.

Peter Grauer, chairman of Bloomberg LP, is a non-executive director at Blackstone.

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