One Equity Partners portfolio company Allegro MicroSystems completes IPO

Submitted 04/11/2020 - 9:46am

Allegro MicroSystems Inc, a portfolio company of middle market private equity firm One Equity Partners (OEP), has completed its initial public offering (IPO) of 25,000,000 shares of common stock on the Nasdaq Global Select Market. 

The shares priced at USD14 per share at the top end of their expected range and trade under the ticker symbol ALGM, raising USD350 million in gross proceeds before deducting the underwriting discount and offering expenses. At the close of trading on 2 November, the company had a market capitalisation in excess of USD3.7 billion. 

Allegro is a manufacturer of advanced sensing and power semiconductor technology products used in automotive, industrial and infrastructure applications by more than 50 automotive original equipment manufacturers and over 10,000 customers worldwide. 

“Allegro is a leading innovator in developing world-class motion control and energy efficient systems and solutions that support advanced automotive and vehicle mobility, green energy, factory automation and other industrial applications,” says Chip Schorr, Senior Managing Director at One Equity Partners. “We’re proud of the strong progress the Company has achieved since our investment. This IPO is another example of how OEP works with exceptional management teams to drive transformational change within our portfolio companies and positions them for continued long-term success.”

“Over the last three years, it has been OEP’s pleasure to work with its excellent partners at Allegro’s majority shareholder, Sanken Electric, as well as this exceptional management team, to position Allegro for rapid growth and improve gross margins by approximately 1,000 basis points, dramatically enhancing the Company’s operational and financial profile,” says Andrew Dunn, Managing Director at One Equity Partners. “We look forward to continuing to assist Allegro on its value creation initiatives as a public company.” 

OEP completed a USD291 million minority investment in Allegro in October 2017. Following the investment, OEP worked closely with Allegro’s majority shareholder, Sanken Electric, Allegro CEO Ravi Vig and senior management to launch an operational excellence program and pursue new strategic growth opportunities. Together, the team has focused on several key areas and generated significant gross margin expansion by optimising Allegro’s manufacturing footprint, pricing strategy, and market expansion activities. The team also redesigned the Company’s sales strategy, global supply chain, and research and development process.

In August, Allegro expanded the scope of its intellectual property and product portfolio with the acquisition of Voxtel, Inc, a company specialising in advanced photonic and 3D imaging including long-range, eye-safe light detection and ranging technology (LiDAR). This transaction combines Voxtel’s deep laser and imaging expertise with Allegro’s automotive leadership and scale to enable the next generation of Advanced Driver Assistance Systems (ADAS).

OEP’s investment in Allegro reflects the firm’s longstanding approach of employing a flexible ownership structure, including making minority investments in partnership with existing owners to drive value creation.
 

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