Applied Aerospace & Defense eyes US$3.59 billion valuation in U.S. IPO

The New York Stock Exchange is seen in New York. (AP Photo/Seth Wenig)

Private equity-backed government contractor Applied Aerospace & Defense is targeting a valuation of up to US$3.59 billion in ​its U.S. initial public offering, as defense firms tap into strong investor appetite for the sector driven by heightened geopolitical tensions.

The Huntsville, Alabama-based company said on Tuesday it is seeking to raise as much as US$682.5 million by offering 32.5 million shares priced between US$18 and US$21 apiece.

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Companies such as Applied Aerospace & Defense are finding a more receptive audience among investors looking to hedge against global instability as the Middle East conflict drags on and defense budgets rise.

Aerospace parts maker Arxis, drone maker AEVEX and radio signal analyzer Hawkeye 360 have gone public in New York in recent weeks.

Applied Aerospace & Defense builds ​a wide range ​of products, including ⁠fuselages, flight control surfaces, solid rocket motor cases and engine shafts for space and defense technology companies.

The company was formed last year when middle-market-focused buyout firm Greenbriar Equity Group combined Applied Aerospace, founded in 1954, and PCX Aerosystems, founded in 1900.

Applied Aerospace & Defense subsequently acquired Consolidated Boring Inc, Vestigo Aerospace and Rainwater Holdings to expand its capabilities, manufacturing capacity and geographic footprint.

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Morgan Stanley and Jefferies are ​among the underwriters for the offering.

Applied Aerospace & Defense will list on the NYSE under the symbol “AADX.”

(Reporting by Pragyan Kalita in Bengaluru; Editing by Jonathan Ananda)