Airo upsizes first post-IPO follow-on
Airo Group raised an upsized US$77.7m from a two-day marketed offering late on Wednesday providing incremental capital while also allowing existing shareholders to partially cash out.
Cantor, BTIG and Mizuho Securities were joint bookrunners for the 4.2m shares sold, including 3.2m primary and 0.9m secondary, 20% larger than the 3.5m earlier marketed.
Books were six times covered, with the top 25 accounts taking 95% of the shares offered, primarily “sticky investors”, a banker on the deal said.
That includes a high 90% hit rate among the 35 investors the CEO met over the past two days, the banker added.
Proceeds from Airo’s first follow on offering after its IPO three months ago will add to its US$40.3m coffers and fund the company’s growth initiatives, including opportunistic acquisitions.
It also allows for liquidity for existing shareholders including co-founder and chairman Chirinjeev Kathuria and CEO Joe Burns.
“The directors and officers hadn’t monetised since inception. They’ve owned the company for five years,” the banker on the deal said. “In the deal, they sold less than 7% of their holdings.”
The road for liquidity is even longer for Kathuria, who founded the drone maker in 2005. Airo confidentially filed for an IPO in 2022, but it was only in June this year that Airo finally listed as a public company. The three bookrunners also led its IPO.
Selling officers are subject to a 120-day lockup after this offering.
The drone maker’s shares rose 2.3% to US$19.86 on Thursday, above Tuesday’s close of US$19.15 when the deal was launched and almost double the US$10 IPO price.
Investors’ warm reception was probably buoyed by news earlier in the week of Airo signing a non-binding letter of intent with Nord Drone LLC to establish a joint venture to accelerate deployment of combat-proven unmanned drones to the US, Ukraine and other NATO member countries.
Airo, which earlier this month joined Russell 2000 and Russell 3000 indexes, posted a 710% leap in adjusted Ebitda to US$4.7m, on an 151% increase in revenues to US$24.6m.