By Andrew Bary
Madison Air Solutions, a roll-up of ventilation and filtration companies controlled by billionaire Larry Gies, is due to go public Wednesday in the biggest initial public offering of 2026.
The company, which owns such businesses as Nortek Air Solutions, AprilAire and Big Ass Fans, plans to offer 82.7 million Class A shares in a range between $25 and $27 a share, raising about $2.2 billion.
That would exceed the $1.5 billion for the Forgent Power Solutions IPO in February. The Madison Air deal is expected to price after the close of trading Wednesday and start trading on Thursday.
Madison Air would be valued at $12.7 billion at the midpoint of the range based on about 490 million outstanding shares. The company plans to list its stock on the NYSE under the ticker MAIR.
The stock won't be valued cheaply at close to 30 times trailing adjusted pro forma net income for 2025, Barron's estimates.
The Madison Air deal could benefit from the strength in so-called HVAC (heating, ventilation and air conditioning) stocks like Carrier Global and Trane this year, which are up an average of about 20%.
"After the recent sell-off in software stocks, investors are looking for companies immune to AI disruption, such as 'real economy' businesses," says Matthew Kennedy, senior strategist at Renaissance Capital. "No coincidence that both Madison and Forgent are large cash-flow-positive industrials benefiting from growth in data center buildouts."
The company has an AI halo, but its revenue from data centers appears modest at around 13%.
Madison Air highlights the increasing focus on air purity among businesses and individuals. Gies, who is around 60, said his motivation for creating Madison Air was his realization that "indoor air quality was horrible," according to a Ret ail Roadshow.com presentation.
The company had $3.5 billion in sales last year on a pro forma basis, almost entirely in North America. The pro forma revenues reflect full-year sales of AprilAire, a residential specialist, which was purchased last year for more than $2 billion. Madison Air has spent $8 billion on some 13 acquisitions since 2017, according to t he deal prospectus.
Madison is much smaller than Carrier, which has over $20 billion in annual sales, and is more comparable to Lennox International, which has about $5 billion.
In its pitch to investors, Madison emphasizes the role of founder Gies, a successful and longtime investor in private manufacturing companies who will own about 15% of the company after the IPO, a stake worth about $2 billion. He will control it through supervoting shares. Madison Air will offer the first opportunity for the public to invest alongside Gies, the company noted.
Madison is seeking to differentiate itself from HVAC giants like Carrier and Trane by emphasizing its focus on air purity, through such processes as filtration, ventilation, humification, and dehumidification. It calls its approach "Return on Air," or the benefits of clean indoor air, including efficiency, productivity and health.
In a letter to prospective investors included in the prospectus, CEO Jill Wyant wrote that the company pursues "high-value niches adjacent to traditional HVAC" with "custom and semi engineered solutions to mission-critical environments where air is vital to customer success."
The company, for instance, gets about 20% of its commercial revenue from data centers, and it also services semiconductor production plants where air purity is critical.
Its revenue split is 63% commercial and 37% residential. Wyant wrote that the company is managed on a decentralized basis.
The company isn't cheaply valued based on the complex financials disclosed on the IPO prospectus.
The company is valued at about 17 times its adjusted pro forma 2025 Ebitda of $937 million based on an enterprise value of about $16 billion, Barron's estimates. This Ebitda figure includes many adjustments.
The stock also is valued at nearly 30 times its adjusted pro forma net income for 2025 of around 90 cents a share, assuming an IPO offering price of $26, Barron's estimates.
Larger HVAC companies like Carrier, Lennox International and Trane are valued similarly with Trane carrying a premium. Carrier and Lennox trade for around 16 times 2025 Ebitda and about 23 times trailing earnings.
One of the pluses with Madison is revenue growth averaging 8% annually over the past five years and adjusted Ebitda margins of more than 25%.
Some of the sales growth appears to reflect acquisitions. Organic revenue growth was 12.4% last year and 2.9% in 2024, according to the prospectus. Virtually all the organic growth has come from the commercial side of the business. The residential market may be depressed by weaker housing activity.
The Madison deal will be a test of investor demand for a roll-up, since such companies generally are valued at a discount to companies that primarily grow internally.
The company will use the vast bulk of the proceeds from the IPO to reduce its ample debt of $5.7 billion to a more manageable $3.5 billion, or about four times trailing adjusted Ebitda.
In a vote of confidence, Gies will purchase $100 million of supervoting Class B shares in conjunction with the offering at the deal price.
Counterpoint Global, which is part of Morgan Stanley Investment Management, and Durable Capital Partners, headed by Barron's Roundtable member Henry Ellenbogen, have indicated an interest in buying up to $525 million of stock at the IPO price, according to the prospectus.
Write to Andrew Bary at andrew.bary@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 15, 2026 01:00 ET (05:00 GMT)
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