StandardAero stockholders to sell 30 million shares

SCOTTSDALE, Ariz. - StandardAero, Inc. (NYSE: SARO), a leading provider of aerospace engine aftermarket services with a market capitalization of $9.56 billion, has announced a secondary offering of 30 million shares by its selling stockholders, affiliates of The Carlyle Group Inc. and GIC Private Limited. The company itself will not be selling any shares, and all proceeds from the offering will go to the selling stockholders. According to InvestingPro data, StandardAero has demonstrated strong revenue growth of 14.8% over the last twelve months, generating $5.24 billion in revenue.

The underwritten secondary offering also includes an option for underwriters to purchase an additional 4.5 million shares. J.P. Morgan, Morgan Stanley, and RBC Capital Markets have been appointed as joint lead book-running managers for the transaction.

This offering is contingent on market conditions and other factors, and there is no guarantee as to when or if the offering will be completed, or the final terms of the offering. The sale of the common stock will take place only through a prospectus, which can be obtained from the offices of J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC.

A registration statement for the proposed offering has been filed with the U.S. Securities and Exchange Commission (SEC) but has not yet become effective. Consequently, these securities cannot be sold, nor offers to buy be accepted, until the registration statement is effective. The offering is subject to the satisfaction of customary closing conditions.

StandardAero specializes in engine maintenance, repair and overhaul, and offers a range of services including engine component repair, on-wing and field service support, asset management, and engineering solutions. The company caters to commercial, military, and business aviation markets. InvestingPro analysis reveals that while the company maintains a solid current ratio of 1.95, indicating strong liquidity, it operates with moderate debt levels and faces challenges with its gross profit margin of 14.4%. For deeper insights into StandardAero’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

The press release includes cautionary statements about forward-looking information pertaining to the secondary offering. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that may affect the offering and the company’s performance include market volatility and other risks outlined in the company’s SEC filings, including its annual report and the preliminary prospectus for this offering. InvestingPro identifies several key metrics that investors should consider, including the company’s elevated P/E ratio of 765.59 and EV/EBITDA multiple of 20.09, suggesting a premium valuation relative to peers. Access to InvestingPro’s full suite of valuation tools and metrics can help investors make more informed decisions about this offering.

The information regarding the secondary offering is based on a press release statement from StandardAero.

In other recent news, StandardAero Inc. reported impressive financial results for the fourth quarter of 2024, with revenues reaching $1.41 billion, surpassing the consensus estimate of $1.36 billion. The company’s adjusted EBITDA was $186 million, exceeding expectations and reflecting a 13.2% margin. Analysts at Bernstein have responded positively, raising the stock target to $35 and maintaining an Outperform rating, citing confidence in the company’s long-term prospects and robust performance. UBS also increased its price target for StandardAero to $28, highlighting the company’s strong revenue growth driven by strategic investments in price, volume, and capacity.

JPMorgan reiterated an Overweight rating with a $34 price target, noting that StandardAero’s guidance for 2025 exceeded expectations in revenue and adjusted EBITDA. However, the firm pointed out concerns about cash conversion, which fell short of forecasts. The company’s strategic focus includes capturing market share in the CFM56 and CF34 engine markets, with long-term visibility provided by a service agreement for LEAP engines.

Despite a negative EPS of -$0.04 for Q4 2024, the market reacted positively to StandardAero’s operational performance, as evidenced by a 3.61% rise in aftermarket trading. The company projects 2025 revenue between $5.8 billion and $5.95 billion, with adjusted EBITDA expected to range from $770 million to $790 million. As StandardAero continues its strategic investments, analysts suggest that the current stock multiple reflects the company’s growth potential, though other names in the Aero sector might offer higher near-term earnings upside.

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