StandardAero Shares Surge After IPO Raises $1.44 Billion
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(Bloomberg) -- StandardAero Inc. shares climbed 36% in the aircraft maintenance services provider’s trading debut, after the firm and some of its investors raised $1.44 billion in an initial public offering.
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The company’s shares closed at $32.75 each on Wednesday in New York, giving the company a market value of nearly $11 billion, based on the outstanding shares in an earlier filing. The IPO priced at $24 per share.
The leap gives the Carlyle Group Inc.-backed company the best first-day performance for a US IPO raising more than $1 billion since Toast Inc. shares jumped 56% in the software firm’s 2021 trading debut, according to Bloomberg calculations.
The offering priced above a marketed range, with StandardAero and affiliates of Carlyle and Singaporean sovereign wealth investor GIC Pte selling 60 million shares in total, after the deal size was increased.
Funds affiliated with BlackRock Inc., Janus Henderson Group Plc and Norway’s $1.8 trillion sovereign wealth fund had separately indicated their interest in buying as much as $275 million worth of shares at the IPO price, the filing showed.
The trading lends a dose of optimism to companies moving ahead with US IPOs before the market for new listings is effectively closed by the election on Nov. 5. On Monday, Cerebras Systems kicked off an IPO that could raise as much as $1 billion, and Platinum Equity-backed technology firm Ingram Micro Holding Corp. filed for its own much-anticipated IPO.
StandardAero is the largest pure-play provider of aerospace engine after-market services for fixed and rotary wing aircraft, serving the commercial, military and business aviation end markets, according to its filing. Customers include GE Aerospace, Honeywell International Inc. and Rolls-Royce Holdings Plc.
Cash for Deals
The first thing StandardAero will do with the IPO proceeds is pay down its most expensive debt, which will free up a “significant amount” of cash, according to Chief Executive Officer Russell Ford. That will enable the firm to pursue more deals, along the lines of the 11 companies StandardAero has acquired in the past seven years.
“We have a very good pipeline to continue that growth over the next decade, so why wouldn’t we be able to continue to do that?” he said in an interview with Bloomberg News.
The Scottsdale, Arizona-based company had a profit through the first half of the year, reversing earlier annual losses, according to the filing. For the first half of the year, StandardAero had net income of $8.6 million on revenue of $2.6 billion. That compared with a loss of about $12.6 million on $2.3 billion in revenue during the same period in 2023.