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May 26 (Reuters) - Private equity-backed government contractor Applied Aerospace & Defense is targeting a valuation of up to $3.59 billion in ​its U.S. initial public offering, as a wave of defense companies aim to capitalize ‌on investor appetite for the sector amid heightened geopolitical tensions.

The Huntsville, Alabama-based company said on Tuesday it is seeking to raise as much as $682.5 million by offering 32.5 million shares priced between $18 and $21 apiece.

Companies such as Applied Aerospace & Defense are finding a more receptive audience among retail investors looking to hedge against global instability as the Middle East conflict drags on and defense budgets rise.

The contractor builds ​a wide range ​of products, including ⁠fuselages, flight control surfaces, solid rocket motor cases and engine shafts for space and defense technology companies.