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Madison Air raises $2.25B in private placement for ebm-papst acquisition

Madison Air raises $2.25B in private placement for ebm-papst acquisition

Money Moves

The 90.1-million-share offering funds the equity side of the $5 billion deal, with closing set for September 1

Yesterday: Private placement announced to fund equity portion

Overview

Updated 56 minutes ago

Madison Air is selling $2.25 billion of its own stock, priced at $24.97 a share, to fund its $5 billion purchase of German fan-maker ebm-papst. Chairman Larry Gies and his affiliate are buying $620 million of the offering themselves.

The private placement, expected to close September 1, removes the biggest financing question hanging over the deal. Madison Air shares rose about 10% on the news, and the acquisition is targeted to close around year-end pending regulatory approvals.

Why it matters

The $5 billion takeover of the world's leading fan-technology maker would reshape the HVAC equipment market that serves nearly every commercial building.

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Key Indicators

$2.25B
Private placement proceeds
Gross proceeds from 90.1 million Class A shares at $24.97 each.
90.1M
Shares sold in the offering
Class A common stock issued in the private placement.
$620M
Gies-affiliated commitments
$300 million from chairman Larry Gies plus $320 million from affiliated Madison Solutions LLC.
$5.0B
Effective acquisition price
Enterprise price of $5.4 billion, or $5.0 billion net of future tax savings.
3.7x
Pro forma net leverage at close
Expected leverage excluding synergies, with a target below 2.5x within two years.
10%
Stock gain on announcement
Madison Air shares rose about 10% after the private placement was announced.

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People Involved

Organizations Involved

Timeline

1963 December 2026

6 events Latest: Yesterday
Tap a bar to jump to that date
  1. Acquisition targeted to close around year-end

    Upcoming Projection

    Close pending regulatory approvals; expected to be accretive to earnings per share in the first year.

  2. Private placement expected to close

    Upcoming Funding

    Offering closes subject to customary conditions; proceeds fully fund the acquisition's equity portion.

  3. Private placement announced to fund equity portion

    Latest Funding

    Madison Air sells 90.1 million shares at $24.97 each, raising $2.25 billion; Gies camp buys $620 million. Shares rise 10%.

  4. Acquisition announced at $5.4B enterprise price

    Announcement

    Deal valued at $5.0 billion net of tax savings; ebm-papst nearly doubles Madison Air's addressable market.

  5. Madison Air signs Sale and Purchase Agreement

    Agreement

    Madison Air and ebm-papst owner families sign the transfer agreement for all outstanding shares and partnership interests.

  6. ebm-papst founded in Mulfingen

    Founding

    German company begins building fans and motors that become the backbone of airflow technology.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

July – November 2008

InBev's $52B Anheuser-Busch buyout (2008)

InBev borrowed heavily to buy Anheuser-Busch for about $52 billion, taking on enormous debt just as the financial crisis hit. The company then spent years selling assets and paying down the leverage.

Then

The deal closed in November 2008, in the middle of the crisis, and forced aggressive asset sales.

Now

The combined company deleveraged over several years, showing both the power and the burden of debt-financed consolidation.

Why this matters now

Madison Air expects pro forma leverage of 3.7x at close and targets under 2.5x within two years. The InBev experience is a cautionary example of what happens when that deleveraging plan runs into a downturn.

November 2017 – March 2018

Broadcom's blocked Qualcomm bid (2018)

Broadcom launched a hostile $117 billion bid for Qualcomm, the largest tech takeover ever attempted. Financing was not the issue — both sides had the resources. The deal died when the Committee on Foreign Investment in the United States (CFIUS) intervened and President Trump blocked it.

Then

Broadcom withdrew the offer in March 2018 and relocated its headquarters from Singapore to the United States.

Now

The episode cemented regulatory review as the decisive variable in large cross-border acquisitions, regardless of financing.

Why this matters now

ebm-papst's acquisition clears its financing hurdle but still faces regulatory approvals. Broadcom shows that regulatory risk can kill a deal even when the money is fully arranged.

February 2019 – March 2020

Danaher buys GE Biopharma (2019)

Danaher agreed to pay $21.4 billion for GE's biopharma business, one of the largest industrial acquisitions of its era. Danaher funded the deal largely with cash and debt, not a big equity raise, because its balance sheet had room.

Then

The deal closed in about 13 months and Danaher absorbed the business into its life-sciences unit.

Now

It became a template for large industrial rollups — except Danaher avoided the shareholder dilution Madison Air is now taking.

Why this matters now

Madison Air chose the opposite path: a large equity issue rather than more debt. The contrast shows how balance-sheet capacity determines whether an acquirer dilutes shareholders or borrows.

Sources

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