Madison Air Solutions Corporation (NYSE:MAIR) said it has agreed to a $2.25 billion private placement of Class A common stock to finance part of its acquisition of ebm-papst Mulfingen GmbH & Co. KGaA & Co. KG, a German industrial equipment manufacturer.
The placement involves 90,108,130 shares priced at $24.97 each. Larry Gies, the company’s chairman and controlling stockholder, and Madison Solutions LLC, an entity affiliated with Gies, committed to purchasing $300 million and $320 million of the shares, respectively. Shares acquired by Gies and Madison Solutions will be subject to transfer restrictions until September 1, 2027, with limited exceptions.
Net proceeds from the placement will cover the equity portion of the $5 billion acquisition, while the remaining funding will come from approximately $2.8 billion in debt and cash. The acquisition is expected to close by year-end, pending regulatory approvals and customary conditions. Madison Air has engaged Goldman Sachs & Co. LLC as lead placement agent and Barclays Capital Inc. as a placement agent.
The company’s pro forma net leverage at the time of acquisition closing is projected to be about 3.7 times, excluding synergies. Madison Air aims to reduce net leverage to below 2.5 times on a trailing 12-month basis within two years of the deal’s completion.
The shares were issued under Section 4(a)(2) of the Securities Act of 1933 and are not registered with the SEC. Madison Air has agreed to file a resale registration statement with the SEC no later than 90 days after the closing date.
