Baltic repair specialist Magnetic MRO has raised €8 million ($9.1 million) from a bonds issue, which it plans to use to acquire one of its competitors.
“Capital raised with the bond issue will be used for acquiring a competitor operating in the same industry and further expanding Magnetic MRO’s business,” Magnetic said in a statement issued on Feb. 4.
The name of the acquisition target was not disclosed.
The bonds, which carry an 8% annual interest rate, were issued through a non-public offering to Baltic institutional investors and private banking customers in December 2018. They will be redeemed on Dec. 21, 2021.
“Magnetic MRO has expanded rapidly in the last couple of years. Despite our fast growth, we hold a very small percentage of the global aircraft maintenance market and there is a lot of room for us to gain a bigger market share,” Magnetic MRO CEO Risto Mäeots said.
The company has previously relied on funding from banks and private equity. Magnetic sees accessing capital markets as “a strategic step” towards achieving its next milestones.
“Entering the public securities market is a carefully planned step in the organization’s long-term strategy and the acquisition of a new company using the raised capital is a noteworthy addition to Magnetic MRO’s existing portfolio,” Magnetic MRO said.