Madison Air to Sell $2.25 Billion in Stock to Fund $5 Billion ebm-papst Deal

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Madison Air Solutions Corporation said on August 25 that it would sell roughly $2.25 billion of new stock to a group of investors that includes its own chairman, part of the funding for a $5 billion acquisition in Germany. The company is issuing 90,108,130 shares of Class A common stock at $24.97 apiece, with proceeds earmarked to help fund the purchase of German air-handling maker ebm-papst, a deal that still needs regulatory approval and is targeted to close around year-end. Chairman Larry Gies is putting in $300 million of his own money toward the private placement, and an affiliated entity, Madison Solutions, is adding another $320 million, with both committing to hold the shares for a year. Even with the fresh equity, Madison Air still plans to fund the deal with roughly $2.8 billion of additional debt and cash, pushing pro forma net leverage to about 3.7 times from the 2.8 times reported at the end of the second quarter, against management's target of getting back under 2.5 times within two years. The company reported second-quarter net sales up 21% to $991.3 million, adjusted EBITDA up 18% to $265.8 million, net income up 129% to $70.5 million and backlog up 133% to $2,868.4 million, and it raised full-year guidance to $3,825 million to $3,925 million in net sales and $1,020 million to $1,065 million in adjusted EBITDA.

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ebm-papstPrivate▲ Positive
Capitalrelevance

Being acquired by Madison Air for $5 billion, providing a cash exit for the German air-handling maker.

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