StandardAero (SARO) took off in its NYSE debut today. Shares of StandardAero shot up to open at $31.00 – up $7.00 for a 29.2 percent gain from their IPO price of $24.00 – when they started trading at midday on Wednesday, Oct. 2, 2024, on the New York Stock Exchange. That strong opening gave StandardAero a market cap of $10.37 billion – right at the first print – for an increase of about $2 billion from its valuation at the $24.00-per-share IPO price.
StandardAero was priced at $24.00 – $1.00 above the top of the $20.00-to-$23.00 range in the prospectus – on Tuesday night, Oct. 1, 2024. The deal was upsized late last week to 60.0 million shares, up from 46.5 million shares initially, according to an S-1/A filing dated Sept. 27, 2024.
Up, Up and Away
Scottsdale, Arizona-based StandardAero is familiar with flight. The company says 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.
At around 2:36 p.m. EDT today, StandardAero’s stock was at $32.50 – up $8.50 for a 35.43 percent gain from its $24.00 IPO price on NYSE volume of about 17.88 million shares.
At the closing bell today – Wednesday, Oct. 2, 2024 – StandardAero’s stock was at $32.75 – up $8.75 or up 36.46 percent – from its IPO price of $24.00. Volume for StandardAero’s first day of NYSE trading was 27,278,578 shares.
J.P.Morgan and Morgan Stanley led the joint book-runners’ team for StandardAero’s IPO. The book-running team 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. (Please see the “Conflict of Interest” note in the prospectus with regard to Carlyle.)
Paying Off Some Debt
StandardAero said it will 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.
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.
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