Loar Announces Pricing of Upsized Public Offering

Rhea-AI Summary

Loar Holdings (NYSE:LOAR) has announced the pricing of its upsized public offering at $85.00 per share, consisting of 5,750,000 shares of common stock. The offering includes 3,852,500 shares from Loar and 1,897,500 shares from existing stockholders. The selling stockholders granted underwriters a 30-day option to purchase up to 862,500 additional shares.

The offering, expected to close on December 12, 2024, will be led by Jefferies and Morgan Stanley as lead book runners, with Moelis as joint book runner. Loar plans to use the net proceeds to repay borrowings under its credit agreement and for general corporate purposes. The company will not receive proceeds from shares sold by existing stockholders.

Positive

• Expected to raise approximately $327.5 million from company-offered shares (3,852,500 shares at $85.00)
• Proceeds will be used to reduce debt, strengthening the balance sheet
• Multiple top-tier investment banks involved in the offering, indicating strong institutional support

Negative

• Significant shareholder dilution with 3,852,500 new shares being issued
• Additional potential dilution from 862,500 shares in underwriters' option
• Current shareholders selling 1,897,500 shares could signal lack of confidence

Insights

Financial Analyst

The upsized public offering of $85.00 per share for 5.75M shares represents a significant capital raise of approximately $488.75M. The structure, with 67% of shares coming from Loar and 33% from existing stockholders, indicates a balanced approach between raising new capital and providing liquidity for existing investors.

The company's intention to use proceeds for debt repayment shows a strategic focus on strengthening its balance sheet. With major underwriters like Jefferies and Morgan Stanley leading the offering, this suggests strong institutional interest. The pricing and size of the offering, particularly being upsized, demonstrates robust market demand and confidence in Loar's business model.

Market Research Analyst

The timing and execution of this offering are particularly noteworthy in the current market environment. The involvement of multiple tier-1 investment banks as underwriters adds credibility to the offering. The additional 30-day option for 862,500 shares provides flexibility to meet excess demand, potentially indicating strong institutional interest.

The $85.00 pricing suggests confidence in Loar's valuation, while the debt repayment strategy could improve the company's financial metrics and reduce interest expenses. This offering could enhance trading liquidity and broaden the institutional shareholder base, potentially benefiting long-term stock performance.

WHITE PLAINS, NY / ACCESSWIRE / December 10, 2024 / Loar Holdings Inc. (NYSE:LOAR) ("Loar"), announced today the pricing of its upsized public offering of 5,750,000 shares of its common stock, including 1,897,500 shares offered by certain stockholders and 3,852,500 shares offered by Loar at $85.00 per share. The selling stockholders have granted the underwriters a 30-day option to purchase up to an additional 862,500 shares of common stock at the public offering price, less underwriting discounts and commissions. The offering is expected to close on December 12, 2024, subject to customary closing conditions.

Loar intends to use the net proceeds from this offering for repayment of borrowings outstanding under its credit agreement and, to the extent of any remaining proceeds, for general corporate purposes, including working capital. Loar will not receive any of the proceeds from the sale of common stock offered by the selling stockholders, including any common stock sold pursuant to any exercise by the underwriters of their option to purchase additional shares.

Jefferies and Morgan Stanley are acting as lead book runners for the offering and Moelis is acting as joint book runner. Citigroup and RBC Capital Markets are additionally acting as book runners. Blackstone is acting as co-manager.

A registration statement relating to these securities has been filed with, and declared effective by, the Securities and Exchange Commission ("SEC"). This offering is being made only by means of a prospectus. When available, copies of the prospectus relating to the offering may be obtained by contacting Jefferies LLC, Attention: Equity Syndicate Prospectus Department, 520 Madison Avenue, New York, NY 10022, by telephone at (877) 821-7388 or by email at prospectus_department@jefferies.com; Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014; and Moelis & Company LLC, Attention: Melissa Mariaschin, Managing Director and Head of Distribution, Capital Markets, 399 Park Avenue, 5th Floor, New York, NY 10022.

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 Loar

Loar Holdings Inc. is a diversified manufacturer and supplier of niche aerospace and defense components that are essential for today's aircraft and aerospace and defense systems. Loar has established relationships across leading aerospace and defense original equipment manufacturers and Tier Ones worldwide.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding the public offering. These statements are not historical facts but rather are based on Loar's current expectations and projections regarding its business, operations and other factors relating thereto. Words such as "may," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expects," "intends," "plans," "projects," "believes," "estimates" and similar expressions are used to identify these forward-looking statements. Such forward-looking statements include, but are not limited to, statements relating to the proposed public offering, including the completion, size and timing of such offering, and the expected use of proceeds from the offering. These statements are only predictions and as such are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, uncertainties related to market conditions, volatility in the price of Loar's common stock, and other factors relating to Loar's business described in the prospectus included in Loar's Registration Statement on Form S-1, as it may be amended from time to time, and Loar's latest Quarterly Report on Form 10-Q, including under the caption "Risk Factors," and Loar's subsequent filings with the SEC. Any forward-looking statement in this press release speaks only as of the date of this release. Loar undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable laws.

Contact:

Ian McKillop
Loar Holdings Investor Relations
IR@loargroup.com

SOURCE: Loar Group Inc.

View the original press release on accesswire.com

FAQ

How much money will Loar Holdings (LOAR) raise from its December 2024 public offering?

Loar Holdings will raise approximately $327.5 million from selling 3,852,500 shares at $85.00 per share, excluding underwriting costs and fees.

What is the price per share for Loar Holdings' (LOAR) December 2024 public offering?

The public offering is priced at $85.00 per share.

How will Loar Holdings (LOAR) use the proceeds from its December 2024 offering?

Loar will use the net proceeds to repay borrowings under its credit agreement and for general corporate purposes, including working capital.

How many shares are existing stockholders selling in Loar Holdings' (LOAR) December 2024 offering?

Existing stockholders are selling 1,897,500 shares, with an option for underwriters to purchase an additional 862,500 shares.

When will Loar Holdings' (LOAR) December 2024 public offering close?

The offering is expected to close on December 12, 2024, subject to customary closing conditions.