Carlyle-Backed StandardAero Aims for $7.7 Billion Valuation in Upsized IPO

Carlyle-backed StandardAero is set to target a valuation of up to $7.69 billion in an upsized initial public offering (IPO), reflecting a robust investor interest in profitable companies. The company plans to sell 60 million shares priced between $20 and $23 each, aiming to raise approximately $1.38 billion, an increase from its earlier target of $1.07 billion.

Key Takeaways

• StandardAero is targeting a valuation of $7.69 billion in its IPO.
• The company plans to sell 60 million shares priced between $20 and $23 each.
• Carlyle and Singapore's GIC will benefit from the sale of some shares.
• StandardAero's revenue increased by 12% in the first half of 2024.
• The IPO is part of a broader recovery in the U.S. IPO market.

Strong Investor Appetite

The upsized IPO underscores the strong appetite among investors for established companies with a proven track record. StandardAero, founded in 1911, provides maintenance, repair, and overhaul services to a diverse clientele, including major airlines and aircraft engine manufacturers like Rolls-Royce and GE Aerospace.

Financial Performance

In the first half of 2024, StandardAero reported a net income of $8.6 million, a significant turnaround from a loss of $12.6 million during the same period last year. The company’s revenue reached $2.6 billion, up from $2.31 billion in the previous year, indicating a solid recovery and growth trajectory.

IPO Details

• Target Valuation: Up to $7.69 billion
• Shares Offered: 60 million
• Price Range: $20 to $23 per share
• Expected Proceeds: Approximately $1.38 billion

The IPO will see Carlyle and GIC selling some of their shares, with Carlyle remaining the majority shareholder post-IPO. The offering is being led by J.P. Morgan and Morgan Stanley, with other notable underwriters involved.

Market Context

The IPO market is gradually recovering from a challenging period, with investors showing a preference for companies that demonstrate strong financial health. Recent successful debuts of other companies have also contributed to a renewed interest in public listings. The Renaissance IPO Index, a benchmark for IPO performance, has risen about 14% this year, signaling a positive trend.

Future Outlook

StandardAero's leadership believes that being a public company will enhance its ability to expand and pursue strategic mergers and acquisitions. The company is well-positioned in the aerospace aftermarket sector, which is expected to grow as airlines increasingly rely on older aircraft that require extensive maintenance.

As the IPO approaches, StandardAero is poised to capitalize on the favorable market conditions and investor interest, marking a significant milestone in its growth journey. The shares are expected to begin trading on the New York Stock Exchange under the ticker symbol 'SARO'.

Sources

• Carlyle-backed StandardAero targets $7.7 billion valuation in upsized IPO, Yahoo Finance Canada.
• StandardAero valued at $10.4 billion as shares jump in NYSE debut, Yahoo Finance Canada.
• Carlyle-backed StandardAero prices IPO above range to raise $1.44 billion, Yahoo Finance Canada.
• Carlyle-backed StandardAero prices IPO above range to raise $1.44 billion, Yahoo Finance Canada.
• Carlyle-Backed StandardAero Nears Pricing IPO Above Range, Yahoo Finance Canada.