Drones anyone? Martin Aircraft seeks $28 million from IPO and Aussie listing as it blasts off for full commercial life

Drones anyone? Martin Aircraft seeks $28 million from IPO and Aussie listing as it blasts off for full commercial life
Martin Aircraft plans to get full lift in delivering its first product in 2016 in the emergency and rescue segment through the First Responder Martin. It is tapping potential investors for about $28 million from a public sale of 50 million shares priced at 55c a piece (A$0.50) as part of its plan to list on the Australian Stock Exchange on Dec 8.

A complete take-up of the offer would mean the company can go full throttle at building the First Responder Martin (FRM) which has an estimated price tag of around US$200,000 (not including the cost of customisation). 

A full share sale will mean a market capitalisation of the $124 million based on 225.3m shares in issue.

Into its 12th prototype, the FRM is looking to take a nibble at a market reportedly valued at around $50 billion in 2012 and expected to reach $131b by 2019 with North America being the largest market followed by Asia Pacific.

Although there are competitors in the market, Martin Aircraft’s engines can fly for half an hour, against the competitors’ flight times of up to 75 seconds. It also operates on petrol engine (against others less readily available fuel), can carry a load of 120kgs, going at 74km/hour. The jet is able to lift to an altitude of about 1,000 metres.

The US Fire Department, for instance, has recently been allowed by the US government to operate drones in environmentally challenging environments and the company hopes to get a crack at this space.

The company says it has received a number of enquiries in this segment from equivalent entities including police, homeland security and fire services.

Listen to Radio Live's interview with Idealog publisher Vincent Heeringa here 
 

The company has no revenue stream and is not expected to have any in the near to medium-term future and has no dividend payments in store for shareholders in the near to medium term.

Martin Aircraft was founded by Glenn Martin in 1998. He has since 1981 been developing the jetpack idea.

Through various capital raising rounds and government grant funding, the company has raised around $19m for its development. In September, the company had a pre-IPO, raising $6.5m from high networth individuals. News reports say the pre-IPO shares were priced at 30c with investors being predominantly Australian, with other from US, New Zealand.

If successfully, the company will focus on developing the FRM with a scheduled target for a first product in Q2 of 2015 and first delivery in Q2 2016, according to its IPO.

Besides the first responder market, the other market segments the company is eyeing are the military, commercial, and recreational use of the jetpacks.

Unmanned drones

In the commercial segment, the company is setting its sight on the prospects of unmanned drones.

The use of drones have increased significantly over the past 10 years, mainly by the Americans where the numbers of military drones deployed have grown from less than 200 in 2002 to over 11,000 a decade later.

Martin Aircraft is also starting to develop the Unmanned Air Vehicle (UAV) commercial version of the Martin Jetpack which can be flown remotely, or in the future via a pre-programmed flight path. This UAV, presently called the “Martin Skyhook”, would have a lifting capacity of up to 105 kgs making it potentially useful in a wide variety of commercial and military applications.

In addition, a “mule train” system is planned to be developed. This would allow for a number of UAVs to follow a manned version.

The UAVs could then be manually flown to a specific point by the manned version to allow for either the dropping of supplies,the rescuing of an individual or an equivalent capability.

Martin Jetpack has just released its initial public offer (IPO) plans, outlining the risks and opportunities and developments in its IPO document. The share sale, which is managed by Ord Minnett, has not been underwritten.

The IPO document notes that an August 2014 report predicts that cumulative global spending on aerial drones over the next decade will amount to $98 billion, with an estimated 12% of this being for commercial purposes.

Other commercial applications, the company says, are in the areas of private security, farm crop and cattle management, weather forecasting, traffic control, journalism for scoping out events and aerial advertising. Law enforcement agencies in the US are also among potential users.

Glenn Martin, a director of the Company, will hold a significant interest in the company following the offer. No. 8 Ventures Nominees, a significant shareholder who has nominated Jenny Morel to the board, will also retain a significant interest post IPO.

The company’s CEO Peter Coker joined the company in 2013. He has a deep background in aviation, having gathered 5,000 military and civil flying hours. He is a qualified qualified flying and weapons instructor with substantial policy and procurement experience.

More recently, he was general manager of Lockheed Martin (NZ) and business development director for Asia Pacific for a Lockheed Martin Business Unit.

Our very own Vincent Heeringa talked with Mark Sainsbury about the Martin Jetpack on his radio show on Radio Live. To listen to the audio, click here.