Loar Announces Launch of Public Offering

Rhea-AI Summary

Loar Holdings (NYSE:LOAR) has launched a public offering roadshow for 4,750,000 shares of common stock. The offering includes 3,166,667 shares from Loar and 1,583,333 shares from existing stockholders. Selling stockholders will grant underwriters a 30-day option for an additional 712,500 shares.

The company plans to use its proceeds to repay credit agreement borrowings and for general corporate purposes. Jefferies and Morgan Stanley are leading the offering as book runners, with Moelis as joint book runner. Citigroup, RBC Capital Markets, and Blackstone are also participating in various roles.

The offering will proceed through an SEC-filed prospectus and is subject to market conditions and regulatory approval.

Positive

• Potential debt reduction through repayment of credit agreement borrowings
• Additional working capital for general corporate purposes
• Strong underwriting team including major financial institutions

Negative

• Significant shareholder dilution from 4.75 million new shares
• Additional potential dilution from 712,500 share underwriter option
• Market uncertainty as offering completion and terms are not guaranteed

Insights

Financial Analyst

This secondary offering marks a significant capital markets event for Loar Holdings. The company plans to issue 3.17M new shares while existing shareholders are selling 1.58M shares, with an additional 712.5K share overallotment option. The primary proceeds will be used to pay down debt, which could improve the company's balance sheet health. However, the offering will dilute existing shareholders by approximately 5.8% based on the new share issuance alone. The involvement of major underwriters like Jefferies, Morgan Stanley and Moelis suggests strong institutional backing. The timing and size of this offering could indicate management's view that the current market conditions and company valuation are favorable for raising capital.

Market Research Analyst

The market's reception to this offering will be important to watch, as it represents a significant liquidity event. The participation of existing stockholders in the sale might raise questions about their long-term outlook, though this is common in secondary offerings. The debt repayment focus suggests a strategic shift toward a stronger financial position, which could benefit long-term investors. The impressive syndicate of underwriters, including six major financial institutions, indicates strong confidence in the offering's success. However, investors should monitor the final pricing and demand levels as indicators of market sentiment toward Loar's growth prospects and current valuation.

WHITE PLAINS, NY / ACCESSWIRE / December 9, 2024 / Loar Holdings Inc. (NYSE:LOAR) ("Loar") announced today that it has launched the roadshow for the public offering of 4,750,000 shares of its common stock, including 1,583,333 shares offered by certain stockholders and 3,166,667 shares offered by Loar. In addition, such selling stockholders expect to grant the underwriters a 30-day option to purchase up to 712,500 additional shares of common stock at the public offering price, less underwriting discounts and commissions.

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 proposed 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.

The proposed offering will be made only by means of a prospectus filed with the U.S. Securities and Exchange Commission ("SEC"). Copies of the preliminary prospectus relating to the proposed 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.

A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, 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. The offering is subject to market conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

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 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 many shares is Loar Holdings (LOAR) offering in its December 2024 public offering?

Loar Holdings is offering 4,750,000 total shares, with 3,166,667 shares from the company and 1,583,333 shares from existing stockholders.

What will Loar Holdings (LOAR) use the proceeds from its 2024 public offering for?

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

Who are the lead underwriters for Loar Holdings' (LOAR) 2024 public offering?

Jefferies and Morgan Stanley are acting as lead book runners, with Moelis as joint book runner.

What is the size of the underwriters' option in Loar Holdings' (LOAR) public offering?

The underwriters have a 30-day option to purchase up to 712,500 additional shares at the public offering price.