AeroVironment announces $1.35 billion in public offerings

ARLINGTON, Va. - Defense technology company AeroVironment, Inc. (NASDAQ:AVAV), whose stock has surged 45% in the past week and currently trades near its 52-week high of $285.99, announced Monday proposed public offerings totaling $1.35 billion, consisting of $750 million in common stock and $600 million in convertible senior notes due 2030.

The company plans to grant underwriters a 30-day option to purchase up to an additional $112.5 million of common stock and $90 million in convertible notes to cover potential over-allotments.

According to the press release statement, AeroVironment intends to use the net proceeds to repay indebtedness under its term loan and outstanding borrowings under its revolving credit facility. Any remaining funds will be directed toward general corporate purposes, including increasing manufacturing capacity.

J.P. Morgan and BofA Securities are serving as lead book-running managers for both offerings, with Raymond James acting as a joint book-running manager for the convertible notes offering.

The company noted that neither offering is conditioned upon the closing of the other, and both are subject to market conditions. AeroVironment has filed a registration statement with the Securities and Exchange Commission for the offerings.

AeroVironment develops and deploys autonomous systems, precision strike systems, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities for military applications.

The offerings come as the company looks to restructure its debt while potentially expanding its production capabilities in the defense technology sector.

In other recent news, AeroVironment’s fiscal year 2025 earnings report has prompted Raymond James to raise its price target on the company to $225 from $200, maintaining a Strong Buy rating. This decision reflects AeroVironment’s strong performance following its merger with BlueHalo and expectations for significant growth. BTIG also increased its price target for AeroVironment to $300 from $225, citing the company’s attractive valuation and the current demand environment. In addition, Goldman Sachs initiated coverage on AeroVironment with a Buy rating, highlighting the increased demand for the company’s products due to the Ukraine conflict. William Blair reiterated its Outperform rating, emphasizing reduced Ukraine exposure risk and strong growth prospects. AeroVironment’s Wildcat drone has achieved significant milestones in the DARPA Early VTOL Aircraft Demonstration program, demonstrating successful transitions and system validations. The company is integrating mission payloads to support various tactical functions, advancing its capabilities in maritime environments. These recent developments underscore AeroVironment’s strategic positioning and growth potential within the defense technology sector.

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