Madison Air Solutions Corporation

Madison Air Solutions Corporation said on August 25 that it would sell roughly $2.25 billion of new stock to a group of investors that includes its own chairman, part of the funding for a $5 billion acquisition in Germany. The company is issuing 90,108,130 shares of Class A common stock at $24.97 apiece, with proceeds earmarked to help fund the purchase of German air-handling maker ebm-papst, a deal that still needs regulatory approval and is targeted to close around year-end. Chairman Larry Gies is putting in $300 million of his own money toward the private placement, and an affiliated entity, Madison Solutions, is adding another $320 million, with both committing to hold the shares for a year. Even with the fresh equity, Madison Air still plans to fund the deal with roughly $2.8 billion of additional debt and cash, pushing pro forma net leverage to about 3.7 times from the 2.8 times reported at the end of the second quarter, against management's target of getting back under 2.5 times within two years. The company reported second-quarter net sales up 21% to $991.3 million, adjusted EBITDA up 18% to $265.8 million, net income up 129% to $70.5 million and backlog up 133% to $2,868.4 million, and it raised full-year guidance to $3,825 million to $3,925 million in net sales and $1,020 million to $1,065 million in adjusted EBITDA.

Stripe announced a deal to buy AI model gateway and routing platform OpenRouter, with Bloomberg reporting the acquisition consideration could exceed $7 billion though financial terms were not disclosed. Madison Air Solutions agreed to acquire ebm-papst at an enterprise purchase price of $5.4 billion, or $5.0 billion net of future tax savings. Virtu Financial was considering a sale of its agency brokerage and technology division that could be worth up to $3.5 billion to $4 billion, according to people familiar with the matter. An investor group led by affiliates of KKR and Dragoneer Investment Group, plus Amwins Group, agreed to acquire Australian insurance company Steadfast Group for about A$7.7 billion, or US$5.5 billion. Bunker Hill Mining agreed to acquire Silver47 Exploration in an all-stock deal valued at about $163 million, forming a larger U.S. silver and critical minerals producer. Mitsubishi Electric agreed to acquire PCI Energy Solutions, a U.S.-based provider of enterprise software for energy management and optimization, for $1.4 billion. Veralto agreed to acquire Cleanwater1 for $465 million, or about $452 million net of estimated tax benefits, with closing expected in Q4 2026.

Madison Air Solutions has agreed to acquire Germany-based ebm-papst for $5.8 billion in total enterprise value, with the all-cash deal expected to close around year-end. The transaction includes approximately $375 million of non-interest-bearing operating liabilities negotiated as a purchase-price reduction, placing the enterprise purchase price at $5.4 billion, or $5 billion after expected future tax savings. Madison Air expects the acquisition to expand its addressable market to about $70 billion, add more than 250 million installed fans, and generate roughly $160 million in annual cost synergies by the end of the third year. The company projects low-single-digit adjusted EPS accretion in the first full year and plans to reduce leverage from below four times at closing to about 2.5 times within two years.

Jim Cramer expressed bullish sentiment toward Madison Air Solutions Corporation on Mad Money, recommending investors buy the stock after a recent pullback. Cramer noted that he initially recommended the airflow and cooling play for data centers and semiconductor manufacturing in mid-April, and the stock has since rallied from $31.75 to just under $40. He highlighted that Madison Air reported much better than expected numbers last month with a very strong full-year forecast. With the stock down about 10% from its highs last week, Cramer said he thinks you buy it right here, right now.