WHITE PLAINS, NY - Loar Holdings Inc. (NYSE:LOAR), a manufacturer and supplier in the aerospace and defense sectors with a market capitalization of $8.25 billion and impressive gross profit margins of 49%, has commenced a roadshow for its upcoming public offering of 4.75 million shares of common stock. The offering consists of 1.58 million shares from certain stockholders and 3.17 million shares from Loar itself. The company also disclosed that the selling stockholders might provide underwriters a 30-day option to buy an additional 712,500 shares.
The proceeds from Loar's share of the offering are earmarked for the repayment of existing debt under its credit agreement. The company currently operates with a moderate debt level and maintains healthy liquidity, with a current ratio of 3.95. Remaining funds, if any, will be allocated for general corporate expenses, including working capital. According to InvestingPro analysis, the company's strong financial health score suggests prudent financial management. However, Loar will not benefit from the proceeds of the stock sold by the current stockholders, including any additional shares potentially sold through the underwriters' option.
Leading the offering's execution are Jefferies and Morgan Stanley (NYSE:MS) as lead book-runners, with Moelis (NYSE:MC) & Company serving as joint book-runner. Citigroup (NYSE:C) and RBC Capital Markets are also participating as book-runners, and Blackstone (NYSE:BX) is involved as a co-manager.
The offering, which is dependent on market conditions and has yet to receive SEC effectiveness, is available only via prospectus. Interested parties can obtain preliminary prospectus copies from Jefferies LLC, Morgan Stanley & Co. LLC, and Moelis & Company LLC.
This announcement follows Loar's pattern of providing essential components for contemporary aircraft and aerospace and defense systems, boasting significant relationships with top manufacturers and Tier One suppliers globally. The company has demonstrated strong market performance, with an 88.52% return year-to-date, though current valuations suggest the stock may be trading above its Fair Value. For deeper insights into Loar's valuation metrics and growth prospects, InvestingPro subscribers have access to over 15 additional key indicators and analysis tools.
The press release also contains forward-looking statements about the public offering, cautioning that these are based on projections and subject to risks and uncertainties. It emphasizes that the statements are not guarantees of future performance and that actual results could differ materially.
The information for this article is based on a press release statement from Loar Holdings Inc.
In other recent news, Loar Holdings Inc. reported a 17% increase in organic growth and an adjusted EBITDA of $35 million in their second-quarter financial results, with total sales reaching $97 million. This strong performance led to an upgrade in stock price targets by RBC Capital Markets, Citi, and Jefferies. Furthermore, Loar Holdings finalized a strategic acquisition of Applied Avionics for $385 million, a move anticipated to boost the company's annual revenues by approximately $40 million and adjusted EBITDA by around $20 million.
RBC Capital Markets has adjusted its outlook on Loar Holdings, increasing the price target to $100 from the previous $80, while retaining an Outperform rating on the stock. This revision comes ahead of Loar Holdings' third-quarter earnings report. The firm's analyst cited multiple factors for the positive stance, including the company's unique market position, robust aerospace and defense industry fundamentals, and a potentially favorable environment for mergers and acquisitions.
Analyst firms Jefferies, Citi, Morgan Stanley, and RBC Capital initiated coverage on Loar Holdings, expressing confidence in the company's potential for significant free cash flow in the coming years and its focus on proprietary products. Citi issued a Buy rating, while Morgan Stanley provided an Equalweight rating. These are the recent developments in Loar Holdings' growth trajectory and financial strategy.
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