The company announced investment funds affiliated with The Carlyle Group and Onex Corporation will sell a total of 35 million shares of Allison Transmission in a secondary offering. The underwriter of the offering, Citigroup, will have the option to buy up to 5.25 million additional shares. Allison Transmission will not receive any proceeds from the offering.
After the offering, Allison will repurchase 5 million of the 35 million shares of common stock sold. The company's purchase price will be the same as the purchase price payable by the underwriter.
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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 revenue growth, increase in net income, 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."