Aerospace parts maker Doncasters targets $4.4 billion valuation in US IPO

By Arasu Kannagi Basil

June 15 (Reuters) – Doncasters is targeting a valuation of up to $4.43 billion in its U.S. initial public offering, becoming the latest aerospace firm to test investor appetite for new listings.

The Derby, United Kingdom-based company is seeking up to $746.7 million in the IPO by offering 23.3 million shares priced between $28 and $32 apiece, it said on Monday.

The U.S. IPO market has gained momentum after a choppy start to the year, with aerospace and defense as well as AI infrastructure themes dominating the lineup since April.

Doncasters will follow Arxis and Applied Aerospace & Defense, fellow aerospace parts makers that have gone public in New York since April.

“The sector buzz can support strong pricing, with investors looking for companies that can show demand, for example through government contracts with long-term agreements and deliverable backlogs,” IPOX Research Associate Lukas Muehlbauer said.

The company’s journey began in 1778 in Sheffield, UK, as a file-making business and has since evolved into a major global aerospace and industrial parts supplier.

Doncasters, which competes with Howmet and Precision Castparts, makes a wide range of complex parts – including blades and vanes – for aerospace engines and industrial gas turbines.

The listing would mark a critical milestone in the turnaround of the nearly 250-year-old company, which completed a debt restructuring in 2020 after being taken over ​by its lenders from the now-defunct buyout firm ​Dubai International Capital.

Doncasters has since more than doubled its revenue, investing more than $170 million to expand capacity and modernize its facilities.

“The caution is that Doncasters is still loss-making amid heavy investments into expanding capacity, so investors will focus on whether those investments can translate into profits,” Muehlbauer said.

Certain existing shareholders have agreed to buy roughly $66 million of Doncasters shares in a concurrent private placement.

Jefferies and Morgan Stanley are lead joint bookrunners. Doncasters will list on the NYSE under the symbol “DPC”.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Vijay Kishore)