Blackstone Considers Initial Public Offering of Gates Corp.

IPO could value auto-parts maker at as much as $9 billion

By Dana Mattioli and Maureen Farrell

Blackstone Group LP is considering an initial public offering of Gates Corp. that could value the
auto-parts maker at as much as $9 billion.

The private-equity giant is in the early stages of laying the groundwork for the possible offering,
according to people familiar with the matter. The business could be worth $8 billion to $9 billion,
one of the people said. It isnt clear whether that includes debt.

Theres no guarantee there will be a Gates IPO any time soon. If there is, it would represent a
relatively quick turnaround for Blackstone, which bought the business three years ago, and likely
signal that the investment has been a good one.

Blackstone acquired Gates in 2014 for about $5 billion. At the time it was the largest private-
equity buyout of an industrial company in more than four years, after the financial crisis put a
chill in deal activity.

Gates, based in Denver, manufactures power transmission belts and fluid power products for
cars, and employs more than 14,000 people in 30 countries

IPO volume of private-equity backed firms so far this year is nearly triple last years level up to
this point as a rising stock market presents attractive exit opportunities. Buyout firms have taken
36 companies public this year on U.S. exchanges, raising $16 billion, up from $5.3 billion via 18
IPOs, according to Dealogic.

One of Blackstones other big holdings, rental-home owner Invitation Homes Inc., went public
earlier this year, raising about $1.5 billion. At the time, it was the largest U.S.-listed IPO in more
than a year. The stock is now trading roughly 15% above its IPO price. Blackstone this month
agreed to merge Invitation Homes with rival Starwood Waypoint Homes in a sign Wall Street is
betting homeownership rates will remain low and that a growing number of U.S. families will
rent.

Write to Dana Mattioli at dana.mattioli@wsj.com and Maureen Farrell at

maureen.farrell@wsj.com

VOCABULARY

Groundwork

Turnaround

Chill

Power transmission belts

Backed

Buyout

Rental-home

Merge

Roughly

Betting

Homeownership