Carlyle-Backed StandardAero Aims for $7.5 Billion Valuation in US IPO, Reports Reuters

By Niket Nishant

Aviation services provider StandardAero, which is supported by the Carlyle Group and Singapore’s GIC, announced on Monday its intention to achieve a valuation of up to $7.54 billion in its upcoming initial public offering (IPO) in the United States.

Based in Scottsdale, Arizona, the company aims to raise up to $1.07 billion by offering 46.5 million shares priced between $20 and $23 each. StandardAero specializes in aftermarket services, including inspections, maintenance, repairs, and overhauls for aerospace engines.

According to a report from McKinsey & Company, the business model holds the potential for strong profit margins with relatively lower capital investments. Additionally, the lifespan of aircraft engines, which can last around three to four decades, provides a sustainable source of long-term revenue.

In recent years, several aircraft equipment manufacturers have entered this sector, and many large commercial airlines also operate their own in-house aftermarket services divisions.

The IPO arrives as the aviation industry continues its recovery from the downturn caused by the COVID-19 pandemic. There is also growing confidence in the Federal Reserve’s ability to manage the economy towards a gradual recovery, further bolstering equity markets.

Jay Bala, CEO of investment firm AIP Asset Management, remarked, “For the IPO market, we’re entering a favorable period for the next few quarters, if not the next few years. I believe we are in the first year of a five-year bull run, which usually benefits companies looking to go public.”

Founded in 1911, StandardAero serves a diverse clientele, including major airlines like American Airlines and Southwest Airlines, along with prominent aircraft engine manufacturers such as Rolls-Royce, GE Aerospace, and Pratt & Whitney.

In April, there were reports that Carlyle was exploring various options for StandardAero, including a potential sale that could place the company’s value at around $10 billion. Carlyle acquired StandardAero from Veritas Capital for approximately $5 billion in 2019.

Funds and accounts managed by Blackrock, Janus Henderson Investors, and Norges Bank Investment Management have expressed interest in purchasing up to $275 million of shares available in the IPO, the company stated.

J.P. Morgan and Morgan Stanley are set to be the lead underwriters for the IPO, with StandardAero planning to list on the New York Stock Exchange under the ticker symbol "SARO."