The announcement came as somewhat of a surprise because initial guidance on spin timing was more Q1 2018. In fact, the plan was to reveal the companies at CES, but instead they used a Barclay’s industry conference. Apparently, according to future CEO Liam Butterworth, they were ready early:
Yes, I would say, so we announced in May the intention to spinoff of the business. And we’ve been working very actively across all of the Delphi teams over the last 6 months. And we got to a point during the summer where most of my team were recruited or in the pipeline to join Delphi Technologies. We felt that we’re in a great position to be able to operate as a standalone company. And clearly, with a lot of the efforts that was going on across all of Delphi within my team and the Delphi teams, we got to the point where we would — we felt we were actually ready to break free and stand out the company earlier than what we originally announced. And as I highlighted on my presentation, I’ve got — all my full team are on board now. Vivid joined me several weeks ago. I’ve got my IR guy. All of the corporate functions are now in place. And so we’re ready to operate as a standalone company, and we feel we’re in a great position to move forward. So we took the decision with Joe and Kevin and the Board of Directors that the time was right to move forward. And I think, just one other thing is, since we announced the spin, the customer reaction has been also very positive. If you look at the bookings performance that we’ve achieved since we announced the spin, we’ve actually accelerated bookings across our entire portfolio, which I think is a very strong reflection that customers believe this is the right thing to do, it’s the right time for the business. And obviously declaring their support by continuing to book new programs with Delphi.
Maybe he just wanted to get as far away from the name ‘Aptiv’ as soon as possible. We have previously discussed some of the challenges and opportunities facing the new companies as the automotive market evolves. Since then, the new Aptiv has continued to actively invest in new technology. Just this month, the company acquired the very promising and well respected autonomous technology company NuTonomy. Despite the ‘unsexiness’, investors aren’t ignoring the powertrain business and an informal poll at that Barclay’s conference revealed that many current investors are more interested in following that business. A When Issued market is already in place and it will be interesting to see how the companies trade in their long awaited opening day.
Disclosure: Author holds no position in any stock mentioned.
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