Loar Holdings Inc. (LOAR) is offering 9,000,000 shares of its common stock, par value $0.01 per share, with the proceeds going to the selling stockholders. The company specializes in designing, manufacturing, and selling niche aerospace and defense components, focusing on mission-critical solutions with high intellectual property content. Approximately 85% of its 2024 net sales were derived from proprietary products, and around 53% came from aftermarket products. The company serves three core end markets: commercial aerospace, business jet and general aviation, and defense.
Loar Holdings qualifies as an "emerging growth company," allowing it to benefit from certain exemptions in disclosure requirements. However, it is also a "controlled company," with Abrams Capital, GPV Loar LLC, Dirkson Charles, and Brett Milgrim collectively owning more than 50% of the voting power, which may limit the influence of other shareholders.
The company faces various risks, including its heavy reliance on the aerospace and defense industry, dependence on key customers, and the cyclical nature of its sales. Additionally, it faces risks related to acquisitions, employee turnover, component availability, government regulations, and technological disruptions.
The selling stockholders have granted underwriters the option to purchase an additional 1,350,000 shares at the public offering price. The underwriters may engage in stabilizing transactions to support the stock price, but no assurance can be given regarding the liquidity of the trading market.
