UPDATE 2-Allison Transmission files for $750 mln IPO

Fri Mar 18, 2011 6:31pm EDT

* Proceeds to repay debt, fund research and infrastructure

* BofA Merrill Lynch, Citi, JPMorgan lead underwriters

NEW YORK, March 18 (Reuters) - Allison Transmission Holdings Inc, which makes automatic transmissions for fire trucks, school buses and military vehicles, filed with U.S. regulators on Friday to raise up to $750 million in an initial public offering.

The filing by Allison is one of a handful of highly-anticipated auto sector IPOs. Chrysler Group LLC and part suppliers International Automotive Components Group (IAC) and Delphi are also expected to come public in the United States and could do so this year.

The rush of auto-related IPOs was kicked off in November with the $23.1 billion flotation of General Motors Co (GM.N).

The U.S. auto industry was driven to the brink of collapse during the financial crisis, with automakers GM and Chrysler both reorganizing in bankruptcy.

The outlook for the industry has since improved, but analysts are closely watching how the unfolding earthquake, tsunami and nuclear crisis in Japan will impact the automotive supply chain.

Allison Transmission's net sales grew to $1.9 billion in 2010, up 9 percent from a year earlier. The company swung to a $29.6 million profit from a $323.9 million loss in the same period.

Indianapolis-based Allison Transmission is owned by private equity firms Carlyle Group [CYL.UL] and Onex. It said it would use proceeds from the offering to repay debts and for investments in technology, infrastructure and research.

Reuters reported in February that Allison Transmission had selected underwriters and was planning to file for an IPO of about $1 billion. [ID:nN24278219]

Bank of America Merrill Lynch (BAC.N), Citigroup (C.N) and JPMorgan (JPM.N) are leading the underwriters on the IPO. The filing did not reveal how many shares the company planned to sell or their expected price. (Reporting by Aditi Sharma in Bangalore, Clare Baldwin in New York and Deepa Seetharaman in Detroit; Editing by Maju Samuel and Tim Dobbyn)

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