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On Monday, StandardAero, Inc., a leader in aircraft engine and engine parts manufacturing, successfully completed its initial public offering (IPO), with a total of 69 million shares of common stock sold at a price of $24.00 per share.
The offering included 53.25 million shares sold by the company and 15.75 million by certain existing stockholders, following the full exercise of the underwriters' option to purchase an additional 9 million shares.
The Scottsdale, Arizona-based company, which trades on the New York Stock Exchange under the ticker NYSE:SARO, raised approximately $1.201 billion in net proceeds after underwriting discounts, commissions, and estimated offering expenses. These funds were strategically utilized to redeem all outstanding senior unsecured PIK toggle notes due 2027 at a total of $475.5 million and to partially prepay the 2024 Term B-1 Loan Facility and the 2024 Term Loan B-2 Facility by $523.7 million and $201.9 million, respectively.
The redeemed senior notes were issued by Dynasty Acquisition Co., Inc., and the prepayments were made toward loans under a credit agreement dated April 4, 2019. As a result of these transactions, the remaining outstanding loans under the 2024 Term B-1 Loan Facility and the 2024 Term B-2 Loan Facility are approximately $1.464 billion and $564.8 million.
In conjunction with the IPO, StandardAero entered into a stockholders agreement with certain stockholders, and filed an amended and restated certificate of incorporation and bylaws with the Secretary of State of Delaware, which became effective immediately.
The information for this report is based on an SEC filing.
InvestingPro Insights
Following StandardAero's successful IPO, InvestingPro data provides additional insights into the company's financial performance and market reception. The stock has shown a remarkable 36.46% return over the past week, month, three months, and six months, indicating strong investor interest post-IPO. This aligns with the InvestingPro Tip highlighting a "significant return over the last week."
Despite the positive market reception, InvestingPro Tips reveal that StandardAero "suffers from weak gross profit margins." This is corroborated by the data showing a gross profit margin of 13.96% for the last twelve months as of Q2 2024. However, the company's revenue growth remains solid at 16.41% in Q2 2024, suggesting potential for future improvement.
It's worth noting that StandardAero "does not pay a dividend to shareholders," which is common for newly public companies focusing on growth and debt reduction, as evidenced by the company's use of IPO proceeds to pay down debt.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for StandardAero, providing a deeper understanding of the company's financial health and market position.
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