As Electric Cars Multiply, This IPO Will Test Big Lithium Value – by Carolina Millan and Jack Kaskey (Bloomberg News – May 3, 2018)

https://www.bloomberg.com/

How much is a lithium business really worth? Enthusiasts of the metal used in rechargeable batteries are about to find out.

FMC Corp. is looking to separate its lithium assets and list a portion of the shares in October, before providing the remainder to FMC shareholders within six months, the Philadelphia-based company said Thursday. It’s set to be the first U.S. initial public offering by a major lithium pure-play.

The decision comes as lithium demand is expected to surge along with purchases of electric vehicles. Demand for the lightweight metal will rise five-fold by 2025, potentially exceeding the world’s production capacity, Chief Executive Officer Pierre Brondeau said in February.

Last year, Brondeau said he expects the new lithium company to be valued at about 15 times anticipated 2019 earnings of about $200 million, or about $3 billion. Earnings now are expected to hit that level in 2018, a year early, as prices for the white metal soar, the company said Thursday. FMC extracts lithium from brine in northwestern Argentina.

The spinoff will be the first opportunity for a major lithium producer’s unit to be valued independently of other operations. Large companies such as Albemarle Corp., Soc. Quimica & Minera de Chile SA and FMC are diversified, with an historical focus on other industries such as specialty chemicals or agricultural compounds.

For the rest of this article: https://www.bloomberg.com/news/articles/2018-05-03/fmc-is-about-to-find-out-how-much-big-lithium-is-worth-with-ipo