AAR announces public offering of 3,000,000 shares of common stock
AAR (NYSE: AIR), a leading aviation services provider, has announced a public offering of 3,000,000 shares of common stock, with an additional 30-day option for underwriters to purchase up to 450,000 additional shares.
The company plans to use the proceeds to repay outstanding borrowings under its unsecured revolving credit facility and for general corporate purposes, including potential future acquisitions. Goldman Sachs, Jefferies, and RBC Capital Markets are serving as joint book-running managers for the offering, which is being made through a shelf registration statement filed with the SEC.
- None.
- Potential dilution for existing shareholders
- Share offering may put downward pressure on stock price
Insights
AAR's 3 million share offering will dilute shareholders by ~8.5% but should strengthen balance sheet by reducing debt and creating acquisition capacity.
AAR Corp (NYSE: AIR) has announced a significant equity offering of 3 million shares with an additional 450,000-share option for underwriters. This offering will have a dilutive effect on existing shareholders, likely around
The company clearly states that proceeds will be used to repay outstanding borrowings on its unsecured revolving credit facility. This suggests management is prioritizing balance sheet strength while also creating financial flexibility for potential future acquisitions. By specifically mentioning acquisition funding as a use of proceeds, AAR is signaling to the market its intent to pursue growth opportunities.
The underwriting team is noteworthy, featuring Goldman Sachs, Jefferies, and RBC Capital Markets as joint book-running managers. This tier-one banking consortium suggests strong institutional interest and confidence in AAR's equity story.
While short-term share price pressure is likely due to dilution, the debt reduction should improve AAR's financial ratios and potentially lower its cost of capital. For existing shareholders, this represents a strategic tradeoff between immediate dilution and enhanced long-term financial flexibility. The company appears to be positioning itself for industry consolidation opportunities while simultaneously strengthening its balance sheet.
The Company intends to use the net proceeds of the offering to repay outstanding borrowings under its unsecured revolving credit facility and for general corporate purposes, which may include funding future acquisitions.
Goldman Sachs & Co. LLC, Jefferies and RBC Capital Markets, LLC are acting as joint book-running managers for the offering.
The proposed offering is being made pursuant to a shelf registration statement on Form S-3, including a base prospectus, that was filed by the Company with the Securities and Exchange Commission ("SEC") and was automatically effective upon filing on July 19, 2023. The proposed offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus. A preliminary prospectus supplement relating to and describing the terms of the offering will be filed with the SEC and will be available on the SEC's website located at www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectus relating to the securities being offered may also be obtained, when available, from: Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street,
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About AAR
AAR is a global aerospace and defense aftermarket solutions company with operations in over 20 countries. Headquartered in the
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This press release contains certain statements relating to future events or results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, which reflect management's expectations about future conditions, including, but not limited to, statements related to the proposed offering and intended use of proceeds from the offering. Forward-looking statements often address our expected future operating and financial performance and financial condition, or targets, goals, commitments, and other business plans, and often may also be identified because they contain words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "likely," "may," "might," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would," or similar expressions and the negatives of those terms.
These forward-looking statements are based on the beliefs of Company management, as well as assumptions and estimates based on information available to the Company as of the dates such assumptions and estimates are made, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. For a discussion of these and other risks and uncertainties, refer to our Annual Report on Form 10-K, Part I, "Item 1A, Risk Factors" and our other filings filed from time to time with the |
Contact:
Investor Relations
+1-630-227-5830
investors@aarcorp.com
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SOURCE AAR CORP.
FAQ
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