425: Cummins Announces Preliminary Results of Oversubscribed Atmus Filtration Technologies Exchange Offer

Cummins' exchange offer for Atmus Filtration Technologies shares was oversubscribed, leading to a pro rata acceptance of tendered shares.

Summary

• Cummins Inc. announced preliminary results for its exchange offer of Cummins common stock for Atmus Filtration Technologies Inc. common stock.
• The exchange offer, which expired on March 13, 2024, was oversubscribed.
• The exchange ratio is 12.0298 shares of Atmus for each share of Cummins accepted.
• Approximately 69,142,112 shares of Cummins were validly tendered.
• Cummins intends to accept 5,574,050 tendered shares in exchange for 67,054,726 shares of Atmus.
• A preliminary proration factor of approximately 6.7% will be applied to tendered shares subject to proration.
• The final proration factor will be announced on March 18, 2024.
• Shares not accepted will be returned promptly after the final proration factor announcement.
• Following the completion of the exchange offer, Cummins will not retain any outstanding shares of Atmus common stock.
• Cummins reported net sales of approximately $34.1 billion for the year ended December 31, 2023.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The oversubscription indicates strong interest, but the proration factor introduces some uncertainty for shareholders.

Positives

• The oversubscription of the exchange offer indicates strong shareholder interest in Atmus.
• Cummins will eliminate its remaining stake in Atmus, potentially simplifying its corporate structure.
• Odd-lot shareholders (holders of fewer than 100 shares) will not be subject to proration, ensuring they can fully participate in the exchange.

Negatives

• Due to oversubscription, shareholders tendering a large number of shares will have only a portion of their shares accepted, subject to a proration factor.

Risks

• The preliminary proration factor is subject to change based on the final number of shares tendered and delivered under guaranteed delivery procedures.
• Forward-looking statements are subject to uncertainties, risks, and changes in circumstances that could cause actual results to differ materially.

Future Outlook

The document contains forward-looking statements regarding the expected effects, timing, and benefits of the exchange offer, as well as Cummins' and Atmus' anticipated financial results. These statements are subject to risks and uncertainties.

Industry Context

This announcement reflects Cummins' ongoing strategy to divest its stake in Atmus, allowing both companies to focus on their respective core businesses. This type of corporate restructuring is common as companies seek to optimize their portfolios and unlock shareholder value.

Stakeholder Impact

• Cummins shareholders who tendered their shares will receive Atmus shares in exchange, subject to proration.
• Atmus will have a more independent ownership structure.
• Cummins will streamline its business by divesting its remaining stake in Atmus.

Next Steps

• Cummins will announce the final proration factor on March 18, 2024.
• Shares of Cummins common stock tendered but not accepted for exchange will be returned to the tendering shareholders.
• Cummins will complete the exchange offer and no longer retain any outstanding shares of Atmus common stock.

Key Dates