Adds analyst comment in paragraphs 4-5, 8-9
By Arasu Kannagi Basil
March 23 (Reuters) - Private equity-backed AEVEX filed for a U.S. initial public offering on Monday, seeking to tap into investor enthusiasm for defense stocks.
The U.S. IPO market remains accessible despite the ongoing Middle East conflict, with some issuers in recent weeks braving volatility to push ahead with their listings.
The defense technology prime contractor, backed by buyout firm Madison Dearborn Partners, reported a net loss of $16.8 million on revenue of $432.9 million in 2025, compared with a net loss of $78.6 million on revenue of $392.2 million a year earlier.
"The U.S. defense budget is enormous, and warfare is moving toward drones regardless of near-term conflicts," said Matt Kennedy, senior strategist at Renaissance Capital, a provider of IPO-focused research and ETFs.
"Even if the Iran war does somehow wind down soon, the suddenness of it will stick with people, along with the notion of a more muscular U.S. military posture."
Global defense spending is accelerating as countries across the world ramp up modernization initiatives and invest in next-generation advanced systems to counter adversaries.
Solana Beach, California-based AEVEX provides airborne intelligence, surveillance and reconnaissance offerings. Its focus areas include precision-strike systems and loitering munitions.
"The IPO window for defense-related firms is wide open. This is driven by the conflict in the Middle East, as well as significant support of the defense sector by the private and public sectors. Defense is generational growth," IPOX CEO Josef Schuster told Reuters.
Schuster added AEVEX's financials display a trajectory similar to the recent deals: shrinking losses and increasing revenues into the IPO with the prospect of reaching profitability in the near term.
AEVEX, which relies heavily on sales to the U.S. government, has over 10,200 autonomous systems delivered and committed by the end of 2026. Its funded backlog stood at $503 million as of December 31.
The company and its backers will sell shares in the offering. Madison Dearborn and CoVant Management bought AEVEX from buyout firm Trive Capital in 2020.
Goldman Sachs, BofA Securities and Jefferies are the lead underwriters. AEVEX will list on the NYSE under the symbol "AVEX."
(Reporting by Arasu Kannagi Basil in Bengaluru. Editing by Alan Barona)
((ArasuKannagi.Basil@thomsonreuters.com))
