StandardAero (SARO) priced its IPO at $24.00 – $1.00 above the top of its $20.00-to-$23.00 range – and sold 60 million shares – the number in the prospectus – to raise $1.44 billion on Tuesday night, Oct. 1, 2024. The above-range pricing gave StandardAero a market cap of about $8.03 billion. StandardAero’s stock is expected to start trading Wednesday, Oct. 2, 2024, on the New York Stock Exchange. (Editor’s Note: This column, initially published Tuesday night, Oct. 1, 2024, was updated early Wednesday, Oct. 2, 2024, with details on IPO proceeds for the company and the selling shareholders.)
StandardAero, Inc., based in Scottsdale, Arizona, says it believes that it is “the world’s largest independent pure-play provider of aerospace engine aftermarket services for fixed and rotary wing aircraft, serving the commercial, military and business aviation end markets,” according to the prospectus. The company is Incorporated in Delaware.
J.P.Morgan and Morgan Stanley led the joint book-runners’ team, which included BofA Securities, UBS Investment Bank, Jefferies and RBC Capital Markets. Other investment banks on the team included Carlyle, CIBC Capital Markets, HSBC, Mizuho Securities, Societe Generale and Wolfe Nomura Alliance.
Of the 60 million shares in the IPO, StandardAero sold 53.25 million shares and the selling stockholders sold 6.75 million shares. The selling stockholders are affiliates of The Carlyle Group and GIC Private Limited. StandardAero expected to receive about $1.28 billion ($1,278.0 million) in proceeds from the IPO. The company will not receive any proceeds from the sale of the selling stockholders’ shares. The selling stockholders’ proceeds from the IPO totaled about $162 million.
StandardAero plans to use the IPO’s proceeds to pay off about $908.2 million in debt, according to the prospectus. As of June 30, 2024, StandardAero’s total outstanding debt was about $3.28 billion.
Blackrock Inc., Janus Henderson Investors and Norges Bank Investment Management – known as the “cornerstone investors” – indicated an interest in buying up to an aggregate of $275 million of stock in the IPO, the prospectus said.
On Friday, Sept. 27, StandardAero upsized the deal by 29 percent to $1.29 billion – up from $1 billion initially. The IPO’s size was increased to 60 million shares – up from 46.5 million shares initially – and the price range was kept at $20.00 to $23.00 – to raise $1.29 billion.
StandardAero is not profitable. For the year that ended Dec. 31, 2023, Standard Aero reported a net loss of $35.1 million on revenue of $4.56 billion.