Madison Air stock jumps on $2.25B placement for ebm-papst buy

Madison Air Solutions Corporation's stock surged by 10% on Tuesday following the announcement of a $2.25 billion private placement aimed at funding its acquisition of ebm-papst. The company plans to sell 90,108,130 shares of Class A common stock at $24.97 per share to accredited investors, with the offering expected to close on or around September 1, 2026.

Madison Air's Chairman, Larry Gies, and Madison Solutions LLC, affiliated with him, have each committed to purchasing $300 million and $320 million of the Class A common stock, respectively. The net proceeds from this private placement will be used to fully finance the equity portion of the anticipated $5.0 billion acquisition of ebm-papst Mulfingen GmbH & Co. KGaA & Co. KG and related entities, with the remaining funding derived from a combination of debt and cash.

This move is anticipated to result in a pro forma net leverage of around 3.7x at closing, with Madison Air aiming to maintain a net leverage below 2.5x on a trailing 12-month basis within two years following the acquisition, contingent on the generation of free cash flow.

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