StandardAero is continuing to “pursue [its] own strategies” after talks collapsed over a possible merger with BBA, says new CEO Russell Ford, but it is open to other partnerships.
BBA and StandardAero parent DAE confirmed in late August that they were exploring merging some aspects of their businesses, a combination that could have created one of the largest independent engine and airframe maintenance, repair and overhaul (MRO) entities worldwide, with annual revenues approaching $2.5 billion. DAE had said the discussions were for “potential combination of certain parts of its business,” but BBA warned that the confirmation did not suggest that a merger would actually occur. The talks fell through shortly thereafter when the companies could not agree to terms.
Ford, who took the reins of StandardAero on Oct. 15 after serving as president of Precision Castparts’ Carlton Forge Works and Dickson Test Group, says StandardAero is moving forward and sees a strong future with new products and services. Ford also calls DAE a “terrific owner” that wants to see the growth of the business.
At the same time, he acknowledges that the company remains open to potential collaborations or partnerships where there might be synergies, and he suggested that a number of other possibilities exist, even a potential initial public offering.
The merger talks were not the first time DAE was believed to be looking for a stakeholder in StandardAero. Rumors surfaced in 2010 that DAE was trying to sell the company that it acquired in 2007 from The Carlyle Group as part of a $1.9 billion deal. Company executives dismissed the speculation at the time, saying StandardAero was not on the auction block “per se.” But DAE did sell its 30% stake in MRO firmto Mubadalla in 2011.
For now, StandardAero is continuing to build on its expansive base of MRO services in both the business and commercial side, and it’s seeking new opportunities to help buffer the continuing market sluggishness. Business aviation services overall have remained flat.
Offsetting that softness is StandardAero’s avionics business, which Marc McGowan, who recently was tapped to lead StandardAero’s Business Aviation sector, says has grown more than 40% this year. Aircell work has helped drive that gain, along with Falcon cockpit upgrades and its first Global Express Batch 3 upgrade. StandardAero expanded its reach into kitting and PMA parts.
McGowan, senior vice president of Business Aviation, says the increased avionics work was part of the company’s growth objectives outlined last year. “Based on our achievements thus far, we’ve been very effective in accomplishing them,” he says.
Other areas such as certification services have skyrocketed over the past year, growing 200%, says McGowan. The company also continues to seek new authorizations, including a number surrounding itsTFE731 engine and RE100 and RE220 APU work. It further received an agreement to support the Legacy 450/500 aircraft at its Augusta, Ga., Houston and Los Angeles facilities. This is part of another concentrated effort to provide whole airframe support.
Beyond the traditional MRO services, StandardAero has eyed new work in other arenas, including the addition this year of aircraft brokerage services. This is a strategic move, Ford says, to “find growth.”