AAR Corp, a provider of aviation services to commercial and government operators, MROs, and OEMs, has acquired HAECO Americas from HAECO Group for US$78 million in an all-cash transaction, subject to customary adjustments. AAR Corp says the purchase price represents a high single-digit multiple of the last 12 months’ EBITDA before the impact of any synergies.
HAECO Americas is the second-largest heavy maintenance provider in North America, behind AAR. The business performs heavy aircraft maintenance, repair, and overhaul (MRO) and modification services at two facilities: one in Greensboro, North Carolina, and one in Lake City, Florida.
The acquisition brings several benefits to AAR:
- It immediately expands AAR’s maintenance footprint and accelerates the company’s objective to grow its Repair & Engineering business.
- It expands the AAR’s relationships with airline customers in North America.
- It helps AAR meet customer demand and grow its operational footprint. AAR’s airframe MRO network in North America has a multi-year backlog, inclusive of its two facility expansions currently underway in Miami and Oklahoma City. The acquisition of HAECO Americas will enable AAR to meet additional customer demand and to optimise its footprint over time.
- HAECO Americas’ more than 1,600 dedicated team members bring a wide range of technical experience on airline and cargo aircraft.
- Synergies: While the transaction will initially be slightly dilutive to AAR’s operating margins, applying its operating model to HAECO Americas’ two facilities is expected to drive “significant” synergy realisation and margin improvement. Once the integration is complete, AAR expects HAECO Americas to achieve operating margins consistent with those of AAR’s current airframe MRO operations, with the opportunity to expand further as the company optimises its overall heavy maintenance footprint.
“In connection with the transaction, we have secured agreements with key customers, totalling over US$850 milion in sales over a multi-year period. These agreements, which effectively sell out the two HAECO Americas facilities, reflect strong demand and our close customer relationships,” said John M. Holmes, AAR’s chairman, president and CEO.
“Moreover, these new facilities will allow us to further optimise our North American footprint, which we expect will lead to incremental margin expansion overall for our Repair & Engineering segment as we execute the integration.”
