Major cash injection positions Amaero as key player in additive manufacturing

Amaero International Limited has successfully raised A$25 million through an upsized institutional placement, following strong demand from both existing and new investors. The company, known for its expertise in additive manufacturing of high-value refractory alloy powders, initially targeted a raise of A$20 million but decided to increase the offering due to overwhelming interest.

The placement was priced at A$0.35 per share, a 4% discount to the last closing price of A$0.365 on 12 September 2024, and involved the issuance of approximately 71.4 million new fully paid ordinary shares to institutional investors. This move represents about 13.1% of Amaero’s existing issued capital.

Use of funds aimed at ramping up production capabilities

The net proceeds from this placement will primarily be allocated to purchasing capital equipment, including a second atomizer, and to enhancing the company’s headquarters in Tennessee. The investment is part of Amaero’s strategic effort to ramp up its production capabilities to meet the growing demand for additive manufacturing materials, particularly in sectors such as defence, space, and aviation.

The company plans to allocate approximately A$12.8 million for capital equipment purchases and A$10.8 million for improvements to its Tennessee facility. A further A$1.3 million will cover the costs of the offer. This distribution underscores Amaero’s commitment to reinforcing its infrastructure to support the burgeoning additive manufacturing market.

Strategic move to capture market share in advanced manufacturing

Amaero’s Chairman and CEO, Hank J. Holland, expressed gratitude to the company’s existing institutional shareholders for their continued support and welcomed new Australian and international investors. Holland noted that the capital raise, along with the qualification of the C103 AM powder and a new agreement with the ADDMAN Group, represents a pivotal milestone for Amaero.

“The combination of this capital raising and our recent agreements positions Amaero as the largest capacity and most responsive U.S. domestic producer of C103, refractory, and specialty alloy powder for additive manufacturing,” Holland stated.

Expert analysis – What does this mean for the additive manufacturing industry?

Industry experts view Amaero’s capital raise as a strategic move to solidify its position in the additive manufacturing sector. With advanced gas atomization technology and a leading yield of additive manufacturing powder, Amaero is well-positioned to meet the rising demand for high-performance materials.

The company’s expertise in Isostatic Powder Processing (IPP) further sets it apart, enabling it to produce large, near-net-shape powder metallurgy parts with properties equivalent to forged materials. This capability addresses a significant gap in the domestic supply chain for critical components, especially in industries like defence and aerospace.

“The additive manufacturing industry is rapidly evolving, and companies like Amaero that are investing in advanced capabilities and capacity are likely to emerge as leaders,” a senior analyst at a manufacturing consultancy firm noted.

Next steps for Amaero following the placement

The next major milestone for Amaero will be the approval of the conditional component of the placement at the company’s Annual General Meeting (AGM) scheduled for 29 October 2024. The company will issue 15.4 million new shares, contingent upon shareholder approval, contributing a further A$5.4 million to the overall raise.

The raised funds and the ongoing improvements in production capabilities are expected to bolster Amaero’s competitive advantage, ensuring it remains at the forefront of the additive manufacturing industry.