Montana Aerospace announces flotation plans to fund M&A drive

Credit: REUTERS/Ralph Orlowski

Adds details, company comment

ZURICH, April 23 (Reuters) - Aircraft components maker Montana Aerospace intends to float on the SIX Swiss exchange, it said on Friday, as it aims to boost its M&A firepower and organic growth in a rapidly consolidating industry.

The Austrian-Swiss company, which numbers Boeing BA.N and Airbus AIR.PA among its customers, wants to raise around 400 million euros from the IPO.

Montana, which makes components for wings and aircraft bodies, wants to become a consolidator in the highly fragmented aviation sector which has been battered by the COVID-19 pandemic and the Boeing 737 MAX safety crisis.

Around 240 million euros is intended for acquisitions, with the remaining cash going into extending its production capacity and capabilities, said the company which also supplies carmakers including Daimler DAIGn.DE, BMW BMWG.DE and Porsche PSHG_p.DE

"There is ...massive pressure from customers to reduce the complexity of an extremely fragmented supply chain. There are thousands and thousands of suppliers at present, which we expect will be reduced," Chief Executive Markus Nolte told Reuters.

"Customers want to work with less suppliers, and only companies with the best design facilities, manufacturing footprint and competence to reduce CO2, for example, will have a future."

The IPO is expected to be completed in the next three to four weeks. The planned free float of 40% would give the company a market capitalisation of around 1 billion euros, according to Reuters' calculations.

Chief Financial Officer Michael Pistauer said the company, which employs 4,800 people, was looking at several potential deals around the world.

Montana Aerospace is owned by Austrian billionaire Michael Tojner via his private equity vehicle Montana Tech Components, which intends to keep a majority stake.

Two international institutional investors have pre-committed approximately 113 million euros in the IPO, in exchange for guaranteed allocations.

In 2019 Montana posted net sales of 783 million euros, and adjusted EBITDA of around 100 million euros. The company has contracted sales of 4.2 billion euros as of end-January 2021, up from 3.0 billion euros in 2020.

(Reporting by John Revill and Oliver Hirt; editing by Brenna Hughes Neghaiwi)

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