Insiders put $620M into Madison Air Solutions Corp (MAIR) for locked-up shares
Rhea-AI Filing Summary
Madison Air Solutions Corp (MAIR) agreed to a private placement of 90,108,130 new Class A shares at $24.97 per share, raising expected gross proceeds of about $2.25 billion before fees. Chairman Larry Gies will invest $300 million and his affiliate Madison Solutions LLC a further $320 million, both subject to a one-year lock-up on the purchased shares, with certain exceptions.
The equity raise is intended to fully fund the equity portion of Madison Air’s previously announced $5.0 billion cash Acquisition of ebm‑papst group entities, alongside approximately $2.8 billion of debt and cash. Pro forma net leverage is expected to be about 3.7x at Acquisition closing, with a stated target of reducing net leverage to below 2.5x within two years, assuming no further material debt incurrences. The new shares will be issued in an unregistered offering under Section 4(a)(2), and Madison Air has agreed to file a resale registration statement for participating investors within specified timeframes after closing.
Positive
- Equity financing of ~$2.25 billion fully funds the equity portion of the $5.0 billion ebm‑papst Acquisition, reducing execution risk around deal funding.
- Strong sponsor alignment: Chairman Larry Gies and Madison Solutions are investing a combined $620 million, with their new shares locked up for one year, signaling commitment to the transaction structure.
- Company expects the ebm‑papst Acquisition to be accretive to earnings per share in the first year following closing, with an articulated plan to reduce net leverage below 2.5x within two years.
Negative
- Issuance of 90,108,130 new shares in the Private Placement is disclosed as potentially causing dilution to existing stockholders.
- Acquisition funding includes approximately $2.8 billion of debt and cash, with expected pro forma net leverage of about 3.7x, increasing balance-sheet risk until deleveraging is achieved.
- Completion of both the Private Placement and the Acquisition remains subject to customary conditions and multiple regulatory clearances, including merger control, foreign investment control and EU Foreign Subsidies Regulation approvals.
Filing Explained
The financing is agreed but not closed; dilution and acquisition funding remain contingent on the September 1 closing.
The August 25 8-K reports an agreed private placement expected to close on
This is a private placement—securities sold to selected investors outside a public offering—and the shares are unregistered, so resale registration is a later step rather than part of the issuance.
For institutional investors other than Madison Solutions, the company agreed to file a resale registration statement no later than 90 calendar days after closing, or, if required acquisition financial information is unavailable, by the earlier of the tenth trading day after that information becomes available and 120 calendar days after closing.
The filing also says the ebm-papst acquisition remains expected around year-end, subject to regulatory approvals and customary closing conditions, so the disclosed equity funding does not itself establish that the acquisition has closed.
8-K Event Classification
4 items: 1.01, 3.02, 7.01, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 3.02
Unregistered Sales of Equity Securities
Securities
The company sold equity securities in a private placement or other unregistered transaction.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Private Placement shares: 90,108,130 shares
Private Placement price per share: $24.97 per share
Private Placement gross proceeds: $2.25 billion
+5 more
8 metrics
Private Placement shares
90,108,130 shares
Aggregate Class A common stock to be sold in the Private Placement
Private Placement price per share
$24.97 per share
Offering price for each Class A share in the Private Placement
Private Placement gross proceeds
$2.25 billion
Expected gross proceeds before fees and expenses
Chairman investment
$300.0 million
Amount of Class A common stock to be purchased by Larry Gies
Madison Solutions investment
$320.0 million
Amount of Class A common stock to be purchased by Madison Solutions LLC
Acquisition cash payable
$5.0 billion
Estimated total cash payable at closing for the ebm‑papst Acquisition
Debt and cash funding
$2.8 billion
Approximate debt and cash component to fund the Acquisition
Pro forma net leverage
3.7x
Expected net leverage at Acquisition closing, excluding synergies
Key Terms
Private Placement, Registration Rights Agreement, Lock-Up Agreement, Section 4(a)(2) of the Securities Act, +2 more
6 terms
Private Placement financial
"today announced a private placement (the “Private Placement”) of approximately $2.250 billion"
A private placement is a sale of securities directly to a selected group of investors, typically institutions or accredited investors, instead of through a public offering. It lets a company raise money faster and with fewer regulatory steps; for existing shareholders it matters because the newly issued shares, often sold at a discount, increase the share count and can dilute their ownership.
Registration Rights Agreement financial
"entered into a Registration Rights Agreement, dated August 25, 2026"
A registration rights agreement is a contract that gives investors the option to have their ownership stakes officially registered with the government, making it easier to sell their shares later. This agreement matters because it provides investors with a clearer path to cash out their investments if they choose, offering more liquidity and confidence in their ability to sell their holdings when desired.
Lock-Up Agreement financial
"each of Mr. Gies and Madison Solutions entered into a Lock-Up Agreement"
A lock-up agreement is a contract that prevents company insiders and early investors from selling their shares for a fixed period after a stock sale, often after an initial public offering. It matters to investors because it temporarily limits the number of shares that can hit the market, which can keep the share price steadier; when the lock-up ends, a sudden increase in available shares can create extra volatility, revealing insiders’ confidence or lack thereof.
Section 4(a)(2) of the Securities Act regulatory
"will be issued pursuant to the exemption from registration provided for under Section 4(a)(2)"
A legal exemption that allows a company to sell securities directly to a limited group of buyers without registering the offering with the Securities and Exchange Commission. Think of it like a private sale among known parties rather than a public auction: it can speed fundraising and reduce disclosure requirements, but it also means less public information, lower liquidity and resale restrictions—factors investors should consider when weighing risk and exit options.
net leverage financial
"At closing of the Acquisition, the Company expects that pro forma net leverage will be approximately 3.7x"
Net leverage measures how many years it would take for a company to pay off its outstanding debt using its annual operating cash flow, after subtracting cash on hand from total debt. Think of it like a household’s mortgage balance minus savings divided by yearly income; a lower number means the company is in a safer position to handle debt, while a higher number signals greater financial risk and potential pressure on profits or growth.
EU Foreign Subsidies Regulation regulatory
"European Commission clearance under the EU Foreign Subsidies Regulation"
FAQ
What is Madison Air (MAIR) raising in this private placement?
Madison Air is selling 90,108,130 Class A shares at $24.97 per share in a Private Placement, for expected gross proceeds of about $2.25 billion before fees and expenses, pursuant to Securities Purchase Agreements with institutional and other accredited investors.
How will Madison Air (MAIR) use the $2.25 billion of private placement proceeds?
Madison Air intends to use the net proceeds from the approximately $2.25 billion Private Placement to fully fund the equity portion of its previously announced $5.0 billion cash Acquisition of several ebm‑papst entities.
How much are insiders investing in Madison Air (MAIR) in this deal?
Chairman Larry Gies has agreed to purchase $300.0 million of Class A common stock, and his affiliate Madison Solutions LLC has agreed to purchase $320.0 million, for a combined insider-related investment of $620.0 million in the Private Placement.
What is the expected leverage for Madison Air (MAIR) after the ebm-papst Acquisition?
At Acquisition closing, Madison Air expects pro forma net leverage to be approximately 3.7x, excluding synergies, and is targeting net leverage of less than 2.5x on a trailing 12‑month basis within two years, assuming no further material debt incurrences.
How is the ebm-papst Acquisition for Madison Air (MAIR) being financed overall?
The Acquisition’s estimated total cash payable at closing is $5.0 billion, funded by the ~$2.25 billion equity Private Placement and approximately $2.8 billion of debt and cash, consistent with the company’s previously disclosed mix of cash on hand and debt and equity financing.
Are there lock-up restrictions on Madison Air (MAIR) insider investments in this private placement?
Yes. Each of Larry Gies and Madison Solutions entered into a Lock-Up Agreement under which the shares they purchase in the Private Placement are generally subject to transfer restrictions until the one-year anniversary of the Closing, subject to certain exceptions.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): August 25, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number): | (I.R.S. Employer Identification Number) | ||||||||||||
(Address of principal executive offices)
(312 ) 262-6374
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 240.425) | |||||
| Soliciting materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Act of 1934 (§240.12b-2 of this chapter). | |||||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||||||||||
Item 1.01 Entry into a Material Definitive Agreement.
Securities Purchase Agreement
On August 25, 2026, Madison Air Solutions Corporation (the “Company”) entered into a Securities Purchase Agreement (the “Institutional Investor Securities Purchase Agreement”) with certain institutional accredited investors named therein (each, an “Institutional Investor” and collectively, the “Institutional Investors”) and a Securities Purchase Agreement (the “Individual Securities Purchase Agreement” and, together with the Institutional Investor Securities Purchase Agreement, the “Securities Purchase Agreements”) with Larry Gies, pursuant to which the Company agreed to sell to the Institutional Investors and Mr. Gies, in a private placement (the “Private Placement”), an aggregate of 90,108,130 shares (the “Shares”) of the Company’s Class A common stock, par value $0.0000001 per share (the “Class A Common Stock”), at an offering price of $24.97 per Share.
Mr. Gies, the Chairman of the board of directors of the Company (the “Board”) and sole manager of the Company’s controlling stockholder, Madison Industries Holdings LLC, has agreed to purchase $300.0 million of Class A Common Stock in connection with the Private Placement. Madison Solutions LLC (“Madison Solutions”), an entity affiliated with Mr. Gies, has also agreed to purchase $320.0 million of Class A Common Stock in connection with the Private Placement.
The gross proceeds of the Private Placement are expected to be approximately $2.25 billion, before deducting applicable fees and other expenses.
The Private Placement is expected to close on September 1, 2026, subject to the satisfaction of customary closing conditions (the “Closing”). The Company intends to use the net proceeds from the Private Placement to fully fund the equity portion of the Company’s previously announced acquisition (the “Acquisition”) of all of the issued and outstanding shares and limited partnership interests in ebm-papst Mulfingen GmbH & Co. KGaA & Co. KG, ebm-papst Mulfingen GmbH & Co. KGaA, ebm-papst Finanzierungsgesellschaft mbH and ebm-papst Verwaltungs GmbH, pursuant to that certain Sale and Purchase Agreement, dated as of August 15, 2026.
The Securities Purchase Agreements each contain customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties and termination provisions.
The Shares to be issued pursuant to the Securities Purchase Agreements have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and will be issued pursuant to the exemption from registration provided for under Section 4(a)(2) of the Securities Act. The Company relied on this exemption from registration based in part on representations made by the Institutional Investors and Mr. Gies. The Shares may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act. Neither this Current Report on Form 8-K, nor any exhibit attached hereto, is an offer to sell or the solicitation of an offer to buy the Shares described herein.
Registration Rights Agreement
In connection with the Private Placement, the Company and the Institutional Investors (other than Madison Solutions) entered into a Registration Rights Agreement, dated August 25, 2026 (the “Registration Rights Agreement”), providing for the registration for resale of the Shares pursuant to a registration statement (the “Registration Statement”) to be filed with the Securities and Exchange Commission (the “SEC”) no later than 90 calendar days following the date of the Closing (the “Filing Date”), or, if certain financial information related to the Acquisition (the “Required Acquisition Financial Information”) is not available to be filed with, or incorporated by reference into, the Registration Statement by such date, then the Filing Date shall instead be the earlier of (i) the tenth trading day following the date on which all Required Acquisition Financial Information is available to be filed with, or incorporated by reference into, the Registration Statement and (ii) 120 calendar days following the date of the Closing.
The foregoing descriptions of the Securities Purchase Agreements and the Registration Rights Agreement are not complete and are qualified in their entirety by reference to the full text of the Institutional Investor Securities Purchase Agreement, Individual Securities Purchase Agreement and Registration Rights Agreement, which are filed as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
In connection with the Private Placement, each of Mr. Gies and Madison Solutions is expected to execute a joinder to the Company’s Existing Registration Rights Agreement, dated as of April 15, 2026, by and among the Company, Madison Industries Holdings LLC, and the other parties thereto (the “Existing Registration Rights Agreement”), which was filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 17, 2026. Pursuant to such joinder, Mr. Gies and Madison Solutions will become parties to the Existing Registration Rights Agreement, and the shares of Class A Common Stock purchased by each of them in connection with the Private Placement will be subject to the Existing Registration Rights Agreement.
Lock-Up Agreements
In connection with the Private Placement, each of Mr. Gies and Madison Solutions entered into a Lock-Up Agreement with the Company (each, a “Lock-Up Agreement”), pursuant to which the shares of Class A Common Stock purchased by each of Mr. Gies and Madison Solutions in connection with the Private Placement will be subject to certain transfer restrictions until the one-year anniversary of the Closing, subject to certain exceptions.
The foregoing description of the Lock-Up Agreements is not complete and is qualified in its entirety by reference to the full text of the form of Lock-Up Agreement, which is filed as Exhibit 10.4 to this Current Report on Form 8-K and incorporated by reference herein.
Item 3.02. Unregistered Sales of Equity Securities.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
Neither this Current Report on Form 8-K nor any exhibit attached hereto is an offer to sell or the solicitation of an offer to buy any securities of the Company.
Item 7.01. Regulation FD Disclosure.
On August 25, 2026, the Company issued a press release announcing the Private Placement. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be deemed to be incorporated by reference into any filing by the Company under the Securities Act, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Cautionary Language Concerning Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. The forward-looking statements included herein are subject to risks and uncertainties. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements give the Company's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “positions,” “likely,” “target,” “goal,” “strategy” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, including the expected closing date of the Private Placement, the expected use of proceeds from the Private Placement, statements regarding the Company's expectations, intentions or strategies regarding the Acquisition, the expected benefits of the Acquisition, the anticipated timetable for completing the Acquisition, and the impact of the Acquisition on the Company's business and future financial condition and operating results.
All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that the Company expected, including: the risk that the conditions to the closing of the Private Placement are not satisfied; that the Private Placement may cause dilution to the Company’s existing stockholders; uncertainties as to the timing of the Acquisition; the risk that the Acquisition may not be completed in a timely manner or at all, which may adversely affect the Company's business; the failure to satisfy the closing conditions, including the receipt of required merger control clearances, foreign investment control clearances and European Commission clearance under the EU Foreign Subsidies Regulation; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the sale and purchase agreement entered in connection with the Acquisition, including in certain circumstances requiring the Company to pay the break fee; the ability of the Company to obtain the necessary financing arrangements, including under the debt commitment letter and the Private Placement; the effect of the announcement or pendency of the Acquisition on the Company's business relationships, operating results and business generally; risks that the Acquisition may disrupt the Company's current business plans and operations; the Company's ability to retain and hire key personnel in light of the Acquisition; risks related to diverting management's attention from the Company's ongoing business operations; unexpected costs, charges or expenses resulting from the Acquisition; potential litigation relating to the Acquisition; the ability of the Company to successfully integrate the target companies following the closing and to achieve the anticipated benefits of the Acquisition, including estimated cost, operations, tax and commercial synergies, and the timeline to realize such benefits; the effects of the Acquisition on the Company's earnings, financial condition, net leverage ratio and credit ratings; the Company's estimates of the size of the markets it serves, including its total addressable market and the runway for growth in those markets, proving to be inaccurate; an inability to reduce or effectively manage its significant indebtedness and interest expense, including through any future financings or
refinancings; a failure to develop and maintain effective internal control over financial reporting, including a failure to design and implement sufficient controls to remediate its material weaknesses; the markets into which the Company sells its products and services declining, not growing as expected, experiencing cyclicality or shifting towards products or services outside of its portfolio; changes in the general economy, the housing market or other business conditions; difficulties executing, integrating or realizing expected benefits from acquisitions, dispositions or joint ventures, or exposure to unexpected liabilities from such transactions, including the Acquisition; the restrictions imposed on the Company's ability to conduct primary follow-on equity offerings during the two-year period following its initial public offering and associated limitations on its ability to raise equity capital to fund growth initiatives, acquisitions or other strategic opportunities; increasing competitive pressures in the Company's industry and the markets in which it operates; difficulties implementing the Company's 80/20 operating model or other strategies intended to improve organic growth, including its artificial intelligence initiatives; an inability to demonstrate or communicate the benefits of the Company's Return on Air value proposition; the loss of key customers; delays, failures or other challenges in developing and commercializing new versions of the Company's products or new features and accessories; unsuccessful efforts to expand into adjacent markets; supply shortages, rising raw material or freight costs or disruptions in the Company's distribution network; inconsistent practices, controls or decision-making arising from the Company's decentralized organizational structure; the incurrence of events causing an impairment of goodwill or other asset impairment charges; disruption of the Company's operations in its manufacturing facilities, wholesale locations or key customer operations, including as a result of tariffs or other trade policies; failures to protect or defend the Company's intellectual property, including trade secrets or proprietary know-how, or infringement, misappropriation or other violations of others' intellectual property; operational disruptions at manufacturing, wholesale, or key customer locations, as well as labor shortages, disruptions or challenges in attracting and retaining qualified personnel; geopolitical conflicts, cybersecurity attacks, natural disasters, climate change, weather and seasonality that disrupt operations or adversely impact demand; changes in or noncompliance with varying domestic and foreign laws, regulations or government contracting requirements; warranty claims, product liability matters, recall claims, litigation or other legal proceedings, including alleged intellectual property infringement claims; violations of environmental, health and safety laws and regulations; changes in government regulations, trade policies and tariffs; decisions made by the Company's founder who controls the Company; and other factors disclosed in the section entitled “Risk Factors” of the Company's prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on April 17, 2026, as may be updated or supplemented by any subsequent filings with the SEC.
The Company derives many of its forward-looking statements from its operating budgets and forecasts, which are based on many detailed assumptions. While the Company believes that its assumptions are reasonable, it cautions that it is very difficult to predict the impact of known factors, and it is impossible to anticipate all factors that could affect actual results. All forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the foregoing cautionary statements, as well as other cautionary statements that are made from time to time in the Company’s other SEC filings and public communications. You should evaluate any forward-looking statements made in the context of these risks and uncertainties. We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Current Report on Form 8-K are made only as of the date hereof. We assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Item 9.01. Financial Statements and Exhibits.
Exhibit Number | Exhibit Description | ||||
| 10.1* | Form of Securities Purchase Agreement, dated August 25, 2026, by and among Madison Air Solutions Corporation and the investors party thereto. | ||||
| 10.2* | Securities Purchase Agreement, dated August 25, 2026, by and between Madison Air Solutions Corporation and Larry Gies. | ||||
| 10.3 | Form of Registration Rights Agreement, dated August 25, 2026, by and among Madison Air Solutions Corporation and the investors party thereto. | ||||
| 10.4 | Form of Lock-Up Agreement. | ||||
| 99.1 | Press release, dated August 25, 2026. | ||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | ||||
* Certain schedules, exhibits and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will provide a copy of such omitted materials to the SEC or its staff upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Madison Air Solutions Corporation (Registrant) | |||||||||||
| Date: | August 25, 2026 | By: | /s/ JJ FOLEY | ||||||||
| JJ Foley | |||||||||||
| Chief Financial Officer | |||||||||||
Exhibit 99.1
Madison Air Announces $2.250 Billion Private Placement
Chicago, Illinois, August 25, 2026 - Madison Air Solutions Corporation (NYSE: MAIR) (the “Company” or “Madison Air”), a global provider of air quality solutions, today announced a private placement (the “Private Placement”) of approximately $2.250 billion of the Company’s Class A common stock, par value $0.0000001 per share (the “Class A Common Stock”). Pursuant to Securities Purchase Agreements with certain accredited investors, the Company has agreed to sell an aggregate of 90,108,130 shares of Class A Common Stock at a purchase price of $24.97 per share. Investors in the Private Placement include Larry Gies, the Chairman of the Company’s board of directors and sole manager of the Company’s controlling stockholder, who has agreed to purchase $300.0 million of Class A Common Stock and Madison Solutions LLC (“Madison Solutions”), an entity affiliated with Mr. Gies, which has agreed to purchase $320.0 million of Class A Common Stock. The offering is expected to close on or about September 1, 2026 (the “Closing”), subject to the satisfaction of customary closing conditions.
Goldman Sachs & Co. LLC acted as lead placement agent, and Barclays Capital Inc. acted as placement agent, in connection with the Private Placement.
The gross proceeds from the Private Placement are expected to be approximately $2.250 billion before deducting the placement agent fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from this offering to fully fund the equity portion of the Company’s previously announced acquisition of all of the issued and outstanding shares and limited partnership interests (such acquisition, the “Acquisition”) in ebm-papst Mulfingen GmbH & Co. KGaA & Co. KG, ebm-papst Mulfingen GmbH & Co. KGaA, ebm-papst Finanzierungsgesellschaft mbH and ebm-papst Verwaltungs GmbH (the “Target Companies”) for estimated total cash payable at closing of $5.0 billion1.
As previously disclosed, the Company intended to fund the Acquisition through a combination of cash on hand and debt and equity financing. The Private Placement constitutes the contemplated equity financing. Therefore, as planned and consistent with the Company’s prior disclosures, following the closing of the Private Placement, the Company will not require funding under the Equity Commitment Letter entered into between the Company and Madison Solutions in connection with the execution of the Sale and Purchase Agreement relating to the Acquisition. Madison Solutions and Mr. Gies support the transaction and both participated in the Private Placement.
Madison Air will fund the Acquisition with the proceeds of the Private Placement and approximately $2.8 billion of debt and cash. At closing of the Acquisition, the Company expects that pro forma net leverage will be approximately 3.7x, excluding the benefit of synergies. The Company is targeting net leverage of less than 2.5x on a trailing 12-month basis within two years following closing of the Acquisition, supported by strong free cash flow generation and a disciplined path to deleveraging and assuming no further material debt incurrences during the period. The Company continues to expect the Acquisition to be accretive to earnings per share in the first year following closing and remains on track to close the Acquisition around year-end, subject to receipt of required regulatory approvals and satisfaction of customary closing conditions.
In connection with the Private Placement, each of Mr. Gies and Madison Solutions entered into a Lock-Up Agreement with the Company, pursuant to which the shares of Class A Common Stock purchased by each of Mr. Gies and Madison Solutions in connection with the Private Placement will be subject to certain transfer restrictions until the one-year anniversary of closing of the Private Placement, subject to certain exceptions.
The Class A Common Stock to be issued pursuant to the Securities Purchase Agreements have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and will be issued pursuant to the exemption from registration provided for under Section 4(a)(2) of the Securities Act. The Company relied on this exemption from registration based in part on representations made by the investors in the Private Placement. The Class A Common Stock may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act.
The Company has agreed to file a registration statement with the Securities and Exchange Commission (“SEC”) covering the resale of the shares of Class A Common Stock obtained through the Private Placement (the “Registration Statement”)
1 Figures assume an exchange rate of 1 EUR to 1.14 USD.
no later than 90 calendar days following the date of the Closing (the “Filing Date”), or, if certain financial information related to the Acquisition (the “Required Acquisition Financial Information”) is not available to be filed with, or incorporated by reference into, the Registration Statement by such date, then the Filing Date shall instead be the earlier of (i) the tenth trading day following the date on which all Required Acquisition Financial Information is available to be filed with, or incorporated by reference into, the Registration Statement and (ii) 120 calendar days following the date of the Closing.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any of these securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
About Madison Air
Madison Air (NYSE: MAIR) is an air quality solutions provider serving priority commercial and residential markets. Through its portfolio of trusted brands, including Addison, AprilAire, Big Ass Fans, Broan-NuTone, Nortek Air Solutions, Nortek Data Center Cooling and Reznor, the Company helps customers improve performance, protect critical assets and create healthier indoor environments. Madison Air's mission is to make the world safer, healthier and more productive through the power of better air.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. The forward-looking statements included herein are subject to risks and uncertainties. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements give the Company's current expectations and projections relating to its financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “positions,” “likely,” “target,” “goal,” “strategy” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events, including the expected closing date of the Private Placement, the expected use of proceeds from the Private Placement, statements regarding the Company's expectations, intentions or strategies regarding the Acquisition, the expected benefits of the Acquisition, the anticipated timetable for completing the Acquisition, and the impact of the Acquisition on the Company's business and future financial condition and operating results.
All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that the Company expected, including: the risk that the conditions to the closing of the Private Placement are not satisfied; that the Private Placement may cause dilution to the Company’s existing stockholders; uncertainties as to the timing of the Acquisition; the risk that the Acquisition may not be completed in a timely manner or at all, which may adversely affect the Company's business; the failure to satisfy the closing conditions, including the receipt of required merger control clearances, foreign investment control clearances and European Commission clearance under the EU Foreign Subsidies Regulation; the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the sale and purchase agreement entered in connection with the Acquisition, including in certain circumstances requiring the Company to pay the break fee; the ability of the Company to obtain the necessary financing arrangements, including under the debt commitment letter and the Private Placement; the effect of the announcement or pendency of the Acquisition on the Company's business relationships, operating results and business generally; risks that the Acquisition may disrupt the Company's current business plans and operations; the Company's ability to retain and hire key personnel in light of the Acquisition; risks related to diverting management's attention from the Company's ongoing business operations; unexpected costs, charges or expenses resulting from the Acquisition; potential litigation relating to the Acquisition; the ability of the Company to successfully integrate the Target Companies following the closing and to achieve the anticipated benefits of the Acquisition, including estimated cost, operations, tax and commercial synergies, and the timeline to realize such benefits; the effects of the Acquisition on the Company's earnings, financial condition, net leverage ratio and credit ratings; the Company's estimates of the size of the markets it serves, including its total addressable market and the runway for growth in those markets, proving to be inaccurate; an inability to reduce or effectively manage its significant indebtedness and interest expense, including through any future financings or refinancings; a failure to develop and maintain effective internal control over financial reporting, including a failure to design and implement sufficient controls to remediate its material weaknesses; the markets into which the Company sells its products and services declining, not growing as expected, experiencing cyclicality or shifting towards products or services outside of its portfolio; changes in the general economy, the housing market or other business conditions; difficulties executing, integrating or realizing expected benefits from acquisitions, dispositions or joint ventures, or exposure to unexpected liabilities from such transactions, including the Acquisition; the restrictions imposed on the
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Company's ability to conduct primary follow-on equity offerings during the two-year period following its initial public offering and associated limitations on its ability to raise equity capital to fund growth initiatives, acquisitions or other strategic opportunities; increasing competitive pressures in the Company's industry and the markets in which it operates; difficulties implementing the Company's 80/20 operating model or other strategies intended to improve organic growth, including its artificial intelligence initiatives; an inability to demonstrate or communicate the benefits of the Company's Return on Air value proposition; the loss of key customers; delays, failures or other challenges in developing and commercializing new versions of the Company's products or new features and accessories; unsuccessful efforts to expand into adjacent markets; supply shortages, rising raw material or freight costs or disruptions in the Company's distribution network; inconsistent practices, controls or decision-making arising from the Company's decentralized organizational structure; the incurrence of events causing an impairment of goodwill or other asset impairment charges; disruption of the Company's operations in its manufacturing facilities, wholesale locations or key customer operations, including as a result of tariffs or other trade policies; failures to protect or defend the Company's intellectual property, including trade secrets or proprietary know-how, or infringement, misappropriation or other violations of others' intellectual property; operational disruptions at manufacturing, wholesale, or key customer locations, as well as labor shortages, disruptions or challenges in attracting and retaining qualified personnel; geopolitical conflicts, cybersecurity attacks, natural disasters, climate change, weather and seasonality that disrupt operations or adversely impact demand; changes in or noncompliance with varying domestic and foreign laws, regulations or government contracting requirements; warranty claims, product liability matters, recall claims, litigation or other legal proceedings, including alleged intellectual property infringement claims; violations of environmental, health and safety laws and regulations; changes in government regulations, trade policies and tariffs; decisions made by the Company's founder who controls the Company; and other factors disclosed in the section entitled “Risk Factors” of the Company's prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on April 17, 2026, as may be updated or supplemented by any subsequent filings with the SEC.
The Company derives many of its forward-looking statements from its operating budgets and forecasts, which are based on many detailed assumptions. While the Company believes that its assumptions are reasonable, it cautions that it is very difficult to predict the impact of known factors, and it is impossible to anticipate all factors that could affect actual results. All forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the foregoing cautionary statements, as well as other cautionary statements that are made from time to time in the Company’s other SEC filings and public communications. You should evaluate any forward-looking statements made in the context of these risks and uncertainties. We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this press release are made only as of the date hereof. We assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.
Investor Relations:
Email: IR@MadisonAir.com
Media Contact:
Email: ccarey@MadisonAir.com
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