TAT Technologies Announces Proposed Private Placement to Israeli Institutional and Accredited Investors

Rhea-AI Summary

TAT Technologies (NASDAQ: TATT) announced a private placement of 673,340 Ordinary Shares to Israeli institutional and accredited investors at NIS 54.95 per share (approx. $15.03). This will represent about 6.2% of outstanding shares post-transaction. The company expects to receive net proceeds of approximately NIS 36.5 million ($10.0 million) for general corporate purposes.

Additionally, FIMI Funds, TAT's largest shareholder, will sell 2,349,706 Ordinary Shares to Israeli investors at the same price, totaling NIS 129.1 million ($35.3 million). After both transactions, FIMI Funds will own about 26.8% of TAT's outstanding shares. The private placement is expected to close in September 2024, subject to customary conditions.

Positive

• Raising approximately $10 million in new capital for general corporate purposes
• Attracting institutional and accredited investors, potentially increasing market confidence

Negative

• Dilution of existing shareholders by approximately 6.2%
• Reduction of FIMI Funds' ownership stake, which could be perceived as decreased confidence from a major shareholder

Financial Analyst

This private placement is a significant capital raise for TAT Technologies, bringing in approximately $10 million in net proceeds. The 6.2% dilution is relatively modest given the potential for growth capital. However, the pricing at NIS 54.95 ($15.03) per share suggests investor confidence in TAT's prospects.

The concurrent sale by FIMI Funds, reducing their stake to 26.8%, could be seen as a partial exit strategy. While this might raise some eyebrows, it's not uncommon for major shareholders to rebalance portfolios. The fact that institutional investors are willing to buy at the same price as the company's offering is a positive signal for market perception of TAT's value.

Market Research Analyst

This move by TAT Technologies reflects a strategic approach to capital raising in the current market environment. By tapping into Israeli institutional investors, the company is leveraging local market knowledge and potentially stronger relationships. The decision to conduct a private placement rather than a public offering suggests a desire for efficiency and possibly a quicker timeline to close the deal.

The involvement of accredited investors indicates a sophisticated investor base with a likely longer-term investment horizon. This could provide more stability to TAT's shareholder structure. However, retail investors should note that this transaction excludes U.S. persons, which might impact liquidity for the stock in the short term.

NETANYA, Israel, Sept. 1, 2024 /PRNewswire/ -- TAT Technologies Ltd. (NASDAQ and TASE: TATT - News) ("TAT" or the "Company"), a leading provider of products and services to the commercial and military aerospace and ground defense industries, announced today that, following the approval of its Board of Directors, it has received and accepted commitments from Israeli institutional and accredited investors (as defined under Israel's Securities Law, 5728-1968) (the "Investors"), to participate in a private placement (the "Private Placement") of Ordinary Shares of the Company ("Ordinary Shares").

The Company is expected to issue and sell to the Investors an aggregate of 673,340 Ordinary Shares (the "Shares"), for a purchase price of NIS 54.95 per Share (approximately $15.03 per Share*). The newly issued Shares are expected to represent approximately 6.2% of the Company's issued and outstanding Ordinary Shares after the consummation of such sale. The closing of the transaction is subject to customary closing conditions and is expected to be completed in September 2024.

The Company expects to receive net proceeds from the sale of the Shares, after deducting offering expenses, of approximately NIS 36.5 million (or approximately $10.0 million*). The Company intends to use such proceeds for general corporate purposes.

In addition, FIMI Israel Opportunity FIVE, Limited Partnership and FIMI Opportunity V, L.P. (the "FIMI Funds"), the Company's largest shareholder, notified the Company that it received and accepted commitments from Israeli institutional and accredited investors to purchase from the FIMI Funds an aggregate of 2,349,706 Ordinary Shares, for a purchase price of NIS 54.95 per Ordinary Share (approximately $15.03 per Ordinary Share*), or an aggregate of NIS 129.1 million (approximately $35.3 million*). The Company will not receive any proceeds from the sale of the Ordinary Shares by the FIMI Funds. Following the consummation of the Private Placement and the private sale of Ordinary Shares by the FIMI Funds, the FIMI Funds are expected to beneficially own approximately 26.8% of the Company's issued and outstanding Ordinary Shares.

The Private Placement and the sale by the FIMI Funds are being made in Israel only and not to U.S. persons, as defined in Rule 902 of the U.S. Securities Act of 1933, as amended (the "Securities Act"), pursuant to a registration exemption afforded by Regulation S promulgated under the Securities Act, and the Shares will be subject to certain transfer restrictions. The Shares will not be registered under the Securities Act and will not be offered or sold in the United States without registration or applicable exemption from the registration requirements according to the Securities Act.

This press release does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities or a solicitation of any vote or approval nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation, sale, issuance or transfer would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

* Calculated based on the exchange rate of $1.00:NIS 3.656, as published by the Bank of Israel on August 30, 2024.

Legal Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this press release include, but are not limited to, statements related to our expectations regarding the issuance and sale of the shares, the closing date of the transaction, and the Company's intended use of the proceeds from the sale of the Shares. Our expectations and beliefs regarding these matters may not materialize, and actual results or events in the future are subject to risks and uncertainties that could cause actual results or events to differ materially from those projected, including, without limitation, as a result of the war and hostilities between Israel and Hamas, Hezbollah and Iran. The forward-looking statements contained in this press release are subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 6, 2024. The forward-looking statements in this press release are based on information available to the Company as of the date hereof, and the Company disclaims any obligation to update any forward-looking statements, except as required by law.

About TAT Technologies Ltd.

TAT Technologies Ltd. is a leading provider of services and products to the commercial and military aerospace and ground defense industries. TAT operates under four segments: (i) Original equipment manufacturing ("OEM") of heat transfer solutions and aviation accessories through its Gedera facility; (ii) MRO services for heat transfer components and OEM of heat transfer solutions through its Limco subsidiary; (iii) MRO services for aviation components through its Piedmont subsidiary; and (iv) Overhaul and coating of jet engine components through its Turbochrome subsidiary. TAT controlling shareholders is the FIMI Private Equity Fund.

TAT's activities in the area of OEM of heat transfer solutions and aviation accessories primarily include the design, development and manufacture of (i) broad range of heat transfer solutions, such as pre-coolers heat exchangers and oil/fuel hydraulic heat exchangers, used in mechanical and electronic systems on board commercial, military and business aircraft; (ii) environmental control and power electronics cooling systems installed on board aircraft in and ground applications; and (iii) a variety of other mechanical aircraft accessories and systems such as pumps, valves, and turbine power units.

TAT's activities in the area of MRO Services for heat transfer components and OEM of heat transfer solutions primarily include the MRO of heat transfer components and to a lesser extent, the manufacturing of certain heat transfer solutions. TAT's Limco subsidiary operates an FAA-certified repair station, which provides heat transfer MRO services for airlines, air cargo carriers, maintenance service centers and the military.

TAT's activities in the area of MRO services for aviation components include the MRO of APUs, landing gears and other aircraft components. TAT's Piedmont subsidiary operates an FAA-certified repair station, which provides aircraft component MRO services for airlines, air cargo carriers, maintenance service centers and the military.

TAT's activities in the area of overhaul and coating of jet engine components includes the overhaul and coating of jet engine components, including turbine vanes and blades, fan blades, variable inlet guide vanes and afterburner flaps.

For more information of TAT Technologies Ltd., please visit our web-site: www.tat-technologies.com 

Contact:
Mr. Ehud Ben-Yair
Chief Financial Officer
Tel: 972-8-862-8503
ehudb@tat-technologies.com

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SOURCE TAT Technologies Ltd.

FAQ

How many shares is TAT Technologies (TATT) issuing in the private placement?

TAT Technologies is issuing 673,340 Ordinary Shares in the private placement.

What is the price per share for TAT Technologies' (TATT) private placement?

The price per share for the private placement is NIS 54.95 (approximately $15.03).

How much capital is TAT Technologies (TATT) expected to raise from the private placement?

TAT Technologies expects to receive net proceeds of approximately NIS 36.5 million (or $10.0 million) from the private placement.

When is the private placement for TAT Technologies (TATT) expected to close?

The private placement is expected to close in September 2024, subject to customary closing conditions.

What percentage of TAT Technologies (TATT) will FIMI Funds own after the transactions?

After the private placement and FIMI Funds' sale, FIMI Funds is expected to own approximately 26.8% of TAT Technologies' outstanding shares.