The company announced the sale of 25 million shares by investment funds affiliated with The Carlyle Group and Onex Corporation. The underwriter also has an option to purchase up to 3.75 million additional shares. The two sponsors are selling all the shares on the pro rata basis and both sponsors are existing stockholders of Allison Transmission.
Allison Transmission will not receive any proceeds from the offering, which should close on or around April 25.
The stock was down 3.41% to $30.06 at 9:46 a.m. on Tuesday. More than 1.6 million shares had changed hands by that point to surpass the average volume of 1,046,690.
Separately, TheStreet Ratings team rates ALLISON TRANSMISSION HLDGS as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALLISON TRANSMISSION HLDGS (ALSN) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."