Amaero International, a US-based manufacturer of niobium and titanium compounds for defence, space and aviation industries, is expected to announce a $25 million equity raise on Monday after securing a key client.

Street Talk understands Amaero, capitalised at $198.3 million on the ASX, found enough demand to raise $25 million via a placement priced at 35¢ a share or a 4.1 per cent discount to the last close. The company’s initial ask was for $20 million, but it received bids for nearly $45 million, sources said.

Shaw and Partners was appointed joint lead manager.

The Tennessee-headquartered business pitches itself as a leading US-based producer of the niobium C103 refractory alloy and titanium powders that are vital to manufacturing parts used in defence, space and aviation industries. Its shares have gained 92 per cent over the past 12 months and 46 per cent year-to-date.

Amaero has pulled the trigger on the equity raise a week after it cleared the final hurdle to set off a five-year binding offtake agreement with a key client, ADDMAN Group, a vertically integrated additive and advanced manufacturing player owned by the $US16 billion ($22.4 billion) specialist private equity player American Industrial Partners.

Under the offtake, ADDMAN will use the ASX-listed company as the primary supplier of C103 refractory and titanium alloys for five years, starting with 0.25 tonnes in 2024 and 2 tonnes next year. Amaero has expressed hopes of ADDMAN’s credentials helping it attract other potential customers.

Deal proceeds will go towards completing the fit-out and improvements at its manufacturing facility in Tennessee, according to a term sheet sent to investors. About $8.5 million was earmarked to fund capital equipment purchases for a second atomiser.

The C103 powder has high-temperature resistance and is used in strategic missiles, and hypersonics or atmospheric weapons capable of travelling at several times the speed of sound.

The powder’s demand is expected to top 105 tonnes in the 2028 financial year, the term sheet said, citing Fairmont Consulting Group’s projection of 62 per cent compounded annual growth rate in the next five years.

Military boat builder Darren Schuback has been in the US winning contracts and preparing for expansion.

Article source: AFR, 15 September 2024.

Disclaimer: This offer is available to Wholesale investors only (as that term is defined in the Corporations Act).  Shaw and Partners Limited acted as Joint Lead Manager for Amaero International Limited in relation to the offer and received fees for that service.