Apollo’s Rexnord In IPO Again

Apollo Management-backed U.S. industrial firm Rexnord Corp. has revived its plans to go public, filing to raise up to $700 million in an initial public offering. Rexnord’s third attempt to go public comes at a time when the industrial economy is recovering across the globe, spurred by strong demand in emerging economies such as India and China.

Private equity firms are also looking to exit their holdings, but investor appetite for IPOs recently has been unpredictable. While Internet firms such as LinkedIn and Yandex have seen strong demand, others such as Freescale Semiconductor and Spirit Airlines, owned by private equity firms, have not been that successful, sister news service Reuters reported.

Milwaukee-based Rexnord makes products for process and motion control—gears, couplings, industrial bearings, aerospace bearings and seals—and water management—drainage products, flush valves and faucet products. The company sells products under brands such as Falk, Rodney Hunt and Fontaine, and serves the mining, petrochemical, energy, aerospace and construction markets. For the latest fiscal year ended March 31, Rexnord’s total sales were $1.70 billion. It recorded a net loss of $51.3 million, hurt by early repayment of debt.

Rexnord had first filed to go public in 2006, when it was owned by The Carlyle Group, for up to $400 million under the name RBS Global Inc. But the plan was scrapped after Apollo offered to buy the company for about $1.83 billion. It again filed for $750 million IPO in 2008, but the prospectus was withdrawn after more than a year without any shares being sold.

Apollo currently owns about 93.8 percent of Rexnord, which plans to use some proceeds of the IPO to pay the private equity firm a fee for terminating management services with it. The rest will be used for redeeming some notes and other corporate purposes, Rexnord said in its filing with the U.S. Securities and Exchange Commission.

The other major shareholder of Rexnord is board chairman George Sherman, former chief executive of diversified manufacturer Danaher Corp. Rexnord intends to list its common stock on the New York Stock Exchange under the symbol “RXN”. In its preliminary prospectus, the company did not say how many shares it planned to sell or their expected price. Rexnord also did not reveal what percentage of common stock Apollo would own after the IPO.

(A. Ananthalakshmi is a Bangalore-based correspondent for Reuters news service. Vidya L Nathan in Bangalore also contributed reporting.)