Aevex Shares Climb 35% After $320Mn US IPO

Aevex Corp shares rose 35% after the maker of military drones raised $320mn in a US initial public offering (IPO).

Shares of the Madison Dearborn Partners-backed firm closed at $26.93 each on Friday in New York, versus an IPO price of $20 apiece.

The offering of 16mn shares was marketed in a range of $18 to $21 each.

The trading gives Aevex a market value of $3bn based on the outstanding shares listed in its filings.

A substantial portion of the company’s revenue last year came from Ukraine, the filing shows. Its two main unmanned systems programs, called Phoenix Ghost and EUCOM AOR Deep Strike, have delivered or committed to deliver more than 9,300 systems, representing more than $1.2bn in contract value through the end of this year.

“The activities we have seen in Ukraine and more recently in Iran just validate the fact that autonomous unmanned systems are going to be a part of modern warfare now and long into the future,” Roger Wells, the company’s chief executive officer, said in a Bloomberg Television interview on Friday.

As defense budgets shift toward advanced technologies, Aevex is well positioned to benefit from rising investor focus on the sector.

The Trump administration is expected to prioritise newer contractors as it expands and modernises its missile stockpile, directing funding towards companies that can produce weapons faster, at lower cost, and with more advanced technology while easing supply chain constraints exposed by recent conflicts.

Aevex is validated by the fact that the US government’s fiscal year 2027 budget proposal came in over $50bn for the same types of systems that the company brings to the market, Roger Wells said.

“We are able to execute in highly contested environments where GPS is denied, communications are jammed and electronic warfare is pervasive with technologically sophisticated adversaries,” he said. The company had a net loss of $16.9mn on revenue of $432.9mn for the year ended December 31, compared with net income of $78.5 on revenue of $392.2mn a year earlier, according to its result filings.

Madison Dearborn and CoVant Management acquired the company in a $450mn leveraged buyout in 2020, according to data provider PitchBook.

Madison Dearborn was expected to hold 79% of the shareholder voting power after the IPO, the filings show.

Goldman Sachs Group Inc, Bank of America Corp and Jefferies Financial Group Inc led the offering.

The company’s shares trade on the New York Stock Exchange under the symbol AVEX.