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Tuesday Ticker: February 2, 2021

Toronto, Ontario ⁠— In this week’s Tuesday Ticker, Magna teases big outcomes regarding its forthcoming partnership with LG, a Toronto-based auto parts manufacturer sets its sights on the TSX and Ford files Takata-related losses with the U.S. Securities and Exchange Commission.

Magna charges on

An impending electrified partnership between Aurora, Ont. based parts manufacturer Magna International and LG Electronics is expected to close in the second quarter of 2020. 

The forthcoming US$1-billion joint venture with LG could see Magna build electric motors, inverters and onboard chargers for customers that will first include General Motors and Jaguar Land Rover.

“We said pre-joint venture that it was our target to have about a quarter of our sales coming from electrified powertrains by 2025,” said Tom Rucker, president of Magna Powertrain, in an interview with Automotive News Canada. “This would be somewhere around US$1.2 or US$1.5 billion. That was pre-joint venture⁠—I think this number is going to grow significantly with the joint venture. 

The company is betting that its powertrain business will continue to be key to its success as more electrified vehicles arrive. According to Magna’s earnings filing, the company’s power and vision segment, which includes powertrain systems, accounted for $2.7 billion in sales in the third quarter of 2020. That represented about 30 percent of the company’s total sales for the period.  

“Our expertise has been and continues to be what we call supplying power to the wheels,” Rucker said. “For the most part, that is neutral to the power source.” 

ABC 123

ABC Technologies, a Toronto-based manufacturer of technical plastics and lightweight vehicle parts has filed a preliminary long-form prospectus for a proposed initial public offering (IPO) by offering common shares of the company under ticker symbol ‘ABCT’ on the TSX.

The number of shares to be sold and the price per common share have yet to be determined, though the company is expecte to offer shares at a price of $12 to $15 for aggregate gross proceeds to the selling shareholder of $255,000,000 or up to $293,250,000 if the over-allotment option is exercise in full.

Upon completion of the offering, ABC Technologies Holdings will have 52,522,392 common shares issued and outstanding, valuing the company at between $630 million and $788 million at the proposed offering price range.

Founded in 1974, Toronto based ABC Technologies is a manufacturer and supplier of custom technical plastics and lightweighting innovations to the North American light vehicle industry, serving more than 25 original equipment manufacturer (OEM) customers globally.

Ford files losses

Ford is recalling three million vehicles across North America due to Takata airbag defects⁠—a move that will cost the automaker an estimated loss of US$610 million, according to a form Ford filed with the U.S. Securities and Exchange Commission last week.

Takata airbags have been known to release shrapnel upon deployment and are currently held responsible for 18 deaths in the States. The recall was made after the National Highway Traffic Safety Administration denied the automaker’s request to forgo the recall.

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