Drone Maker AeroVironment Shares Sink on Plan to Sell $1.35B in Stock and Debt
Along with the public offering, underwriters will have the option to buy another $112 million worth of stock and $90 million in debt.
The maker of military drones paid $4.1 billion to acquire BlueHalo.Shares of AeroVironment (AVAV) dropped 7% Tuesday, a day after the maker of military drones announced $1.35 billion in stock and debt offerings to pay for an acquisition.
AeroVironment said it planned to sell $750 million in shares and $600 million in convertible notes to the public. It will give underwriters a 30-day option to purchase an additional $112 million worth of stock, and the ability to buy another $90 million of debt "solely to cover over-allotments, if any, in the Convertible Notes Offering."
In May, AeroVironment completed its $4.1 billion purchase of defense technology provider BlueHalo.To pay for the deal, AeroVironment drew on a term loan with an $700 million initial principal amount and drew $225 million from its revolving credit facility to settle the existing indebtedness of BlueHalo and cover transaction expenses.
The company explained that it planned to use the money raised in the offering "to repay indebtedness under its term loan and outstanding borrowings under its revolving credit facility, and the remainder, if any, for general corporate purposes, including to increase manufacturing capacity."
AeroVironment shares hit a record high yesterday, and even with today's losses they're up 70% year-to-date.
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