Moove Lubricants postpones USD400 million U.S. IPO

Moove Lubricants, a major Brazilian lubricant producer and a subsidiary of the conglomerate Cosan, has postponed its planned USD400 million initial public offering (IPO) on the New York Stock Exchange (NYSE). The decision came as Cosan cited “adverse market conditions” in a securities filing.

Cosan was expected to have a 60.4% stake in Moove following the IPO, after selling 6.25 million shares. Private equity firm CVC Capital Partners Plc, which currently has a 30% stake, was supposed to sell 12.5 million shares.

The offering was led by JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Itau BBA, BTG Pactual and Banco Santander SA. 

Moove, which produces and distributes lubricants for automotive, agricultural, and industrial sectors, had filed to raise USD400 million by offering 25 million shares (75% secondary) at a price range of USD14.50 to USD17.50 each share. The IPO was expected to value the company at up to USD1.94 billion, according to initial reports.

However, a source familiar with the matter revealed that demand for shares was lower than anticipated, with some investors expressing concerns about the company’s base in Brazil. This led Cosan to cancel the IPO, although it did not specify if or when the offering might resume. 

Moove Lubricants, founded in 2008 after Cosan acquired ExxonMobil’s Brazilian lubricant assets, produces a variety of products under the Mobil brand. These include engine oils, industrial fluids, and greases, which are distributed across South America, the United States, and Western Europe.

In the 12 months ending June 2024, Moove recorded USD1.8 billion in sales. The IPO would have been the first by a Brazilian company in the U.S. since the listing of digital lender Nu Holdings Ltd. in December 2021.

Cosan also has a partnership with Shell, called Raízen, one of Brazil’s top four companies by revenue. Raízen has a production capacity of 3 billion litres of ethanol and processes 105 million tonnes of sugarcane annually across its 35 bioenergy parks. It stands as Brazil’s second-largest fuel distributor and the leading producer of sugarcane ethanol. Additionally, Raízen is the largest individual exporter of sugarcane in the global market, reinforcing its prominent role in both the domestic and international energy sectors.