Amaero International Ltd (ASX:3DA) is a global specialist in metal additive manufacturing for the defence, aerospace and tooling sectors. The company has announced it has raised US$7.6m (A$11m) at $0.21/share from institutional investors led by US private equity fund Pegasus Growth Capital and a group of US institutional investors managed by the company’s US strategic adviser Omer Granit. The funds will be used to finalise the installation and commissioning of 3DA’s Melbourne titanium alloy powder plant, which will take Amaero to cashflow positive, and to identify and pursue US strategic alternatives with Guggenheim Securities. Pegasus Growth Capital’s managing partner Hank Holland will join the Amaero board, subject to regulatory approvals. We have incorporated the raise together with the half-year accounts and taken into account the recent Q3 cashflow report, resulting earnings adjustments to FY22 and FY23. In this report we have also dimensioned the impact of a five-fold expansion of the titanium alloy powder facility in CY2023, as outlined by the company in a March 2022 investor presentation, and this points to a DCF valuation of $2.24/share or $541m, based on a Ti64 price per kilo of US$205. This compares with our current valuation of $0.70/share, which incorporates the additional shares from the capital raise. Our base-case valuation, fully diluted for options conversion, is $0.60/share.
13 May 2022
Capital raised to deliver on growth options
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Capital raised to deliver on growth options
Amaero International Ltd (ASX:3DA) is a global specialist in metal additive manufacturing for the defence, aerospace and tooling sectors. The company has announced it has raised US$7.6m (A$11m) at $0.21/share from institutional investors led by US private equity fund Pegasus Growth Capital and a group of US institutional investors managed by the company’s US strategic adviser Omer Granit. The funds will be used to finalise the installation and commissioning of 3DA’s Melbourne titanium alloy powder plant, which will take Amaero to cashflow positive, and to identify and pursue US strategic alternatives with Guggenheim Securities. Pegasus Growth Capital’s managing partner Hank Holland will join the Amaero board, subject to regulatory approvals. We have incorporated the raise together with the half-year accounts and taken into account the recent Q3 cashflow report, resulting earnings adjustments to FY22 and FY23. In this report we have also dimensioned the impact of a five-fold expansion of the titanium alloy powder facility in CY2023, as outlined by the company in a March 2022 investor presentation, and this points to a DCF valuation of $2.24/share or $541m, based on a Ti64 price per kilo of US$205. This compares with our current valuation of $0.70/share, which incorporates the additional shares from the capital raise. Our base-case valuation, fully diluted for options conversion, is $0.60/share.