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Livent's IPO: What You Need To Know

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Livent's IPO: What You Need To Know
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Lithium company Livent is set to begin trading on the New York Stock Exchange under the ticker symbol “LTHM.” The stock is expected to debut Thursday, Oct. 11, although an official IPO date has not yet been released.

The Details

The company will sell 20 million shares of common stock at a price ranging between $18 and $20 per share, according to the S-1 filing.

Livent announced late Wednesday it priced its IPO at $17 per share.

Livent reported revenue of $264.1 million in 2016 and $347.4 million in 2017, for a 32-percent growth rate. Net income amounted to $47.1 million in 2016 and $42.2 million in 2017.

As the sole producer of high-purity lithium metal in the Western Hemisphere, related sales represented over 80 percent of the company’s sales in 2017.

Underwriters of the IPO include Bank of America Merrill Lynch, Goldman Sachs, Credit Suisse, Citigroup, Loop Capital Markets and Nomura.

The Products

Livent provides polymers, greases and lithium compounds for use in electric vehicles, pharmaceuticals and aerospace. In May, the company announced plans to increase lithium hydroxide production capacity from 10 kMT to 30 kMT by 2019, further driving production to accommodate the rising electric vehicle market.

“According to Bloomberg New Energy Finance, EV sales are expected to reach 60.2 million units in 2040, representing a penetration rate of 55 percent of all vehicles sold. Automotive original equipment manufacturers have announced plans to introduce longer-range EV models using higher-energy density batteries, and are increasingly doing so by moving to high nickel content cathode materials. This shift will increasingly require battery-grade lithium hydroxide in the production of cathode materials,” the S-1 filing said.

A Controlled Company

The company intends to use the IPO proceeds to make a distribution to FMC and to fund origination fees associated with the revolving credit facility. As a wholly owned subsidiary of FMC Corp. (NYSE: FMC), Livent said it will likely not retain its own board of directors.

FMC will own 86.01 percent of the voting power, as Livent is considered a “controlled company” under New York Stock Exchange rules.

“Under these rules, a 'controlled company' may elect not to comply with certain corporate governance requirements, including the requirement to have a board comprised of a majority of independent directors. We intend to take advantage of these exemptions following the completion of this offering,” the company said in the filing.

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