Cummins launches exchange offer for shares of former filtration business


Cummins Inc. announced on Wednesday that it plans to launch an exchange offer to shed its post-IPO stake in its former filtration business, now a standalone company called Atmus Filtration Technologies Inc.

The planned exchange offer is expected to give Cummins shareholders the option to exchange all or a portion of their Cummins shares for Atmus shares at a 7% discount, Cummins said. The Columbus-based company is seeking to fully split off its remaining interest in Atmus.

“This separation will create value for both Cummins and Atmus, allowing Cummins to continue its focus on key strategic initiatives and innovating in both core and new technologies, while allowing the filtration business the ability to operate and grow with flexibility,” Cummins Chair and CEO Jennifer Rumsey said in a statement on Wednesday. “Leveraging its advanced filtration technologies and capabilities, Atmus is well positioned to grow into new markets and help both existing and new customers be successful. We believe now is the right time to distribute our Atmus shares, and we are confident that the share exchange is the appropriate path forward to bring the greatest value to shareholders. I am excited to see what the future holds for the company.”

The announcement of the planned exchange offer comes about six months after Atmus completed an IPO, which is when a company’s stocks are sold publicly for the first time.

IPOs are generally underwritten by investment banks that arrange for the shares to be traded on a stock exchange. Atmus shares are traded on the New York Stock Exchange under the symbol ATMU.

During the IPO, about 16.24 million Atmus shares were sold, or around 19.5% of all shares. Cummins retained about 67 million shares, or a roughly 80.5% stake in the Nashville-based company.

In August 2021, Cummins unveiled plans to explore “strategic alternatives” for its filtration business, including potentially spinning it off into a separate company or selling it altogether.

The business was founded in 1958 as the Seymour Filter Co., and designs, manufactures and sells air, fuel, hydraulic and lube filtration, as well as chemical technology products for diesel and gas-powered equipment around the world, according to its website.

Atmus is headquartered in Nashville, Tennessee, and employs about 4,500 people globally. The company’s name, Atmus Filtration Technologies, is derived from “atmosphere” and “reflects its purpose of creating a better future by protecting what is important,” Cummins said.

In 2021, then-Cummins Chairman and CEO Tom Linebarger told financial analysts that the company was exploring “a range of options” for the business unit, telling financial analysts that “the business is doing great” but “we just think it can operate separately from us more effectively going forward.”

On Wednesday, Atmus reported $1.63 billion in net sales in 2023, up about 4% from 2022, according to filings with the U.S. Securities and Exchange Commission. The Nashville-based company said the increase in sales was primarily driven by pricing increases that were partially offset by a decrease in volume.

“Today marks an important milestone in our 65-year history of providing industry-leading filtration and media solutions to our customers,” said Atmus CEO Steph Disher in a statement on Wednesday. “Our Atmus team delivered strong performance in our first year as a public company and we are just getting started. I am excited to work alongside our talented and highly capable team to realize the full potential of Atmus as we transition to a fully independent company.”

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