AerSale Chief Sees Expanding Asset Buys, Conversions Work

Monocle Acquisition and AerSale completed their merger at the end of last year.
Credit: AerSale

Even during the virus crisis, MROs and aftermarket companies in the right businesses have remained attractive partners to private-equity investors.

U.S.-headquartered AerSale, considered a diversified business, recently merged with Monocle Acquisition, a special purpose acquisition company.

The combination of businesses was approved by Monocle stockholders at a special meeting in late December 2020, and the newly combined company is now trading common stock on the Nasdaq Capital Market.

AerSale chairman and CEO Nicolas Finazzo says the merger strengthens the company's financial position and “provides us with resources to further execute on our plans to expand our asset purchase program, extend our reach in passenger-to-freighter conversions and bring our AerAware technology to market.”

AerSale’s relationship with its anchor investor Leonard Green & Partners will continue post-merger. But Finazzo notes that AerSale’s becoming a public company, “will further strengthen our reputation as a market leader in aviation aftermarket solutions."

Opportunity, not distress, apparently motivated the transaction. AerSale’s performance and prospects already looked bright before the merger. Monocle has estimated that AerSale will report strong earnings before interest, taxes, depreciation and amortization in both 2020 and 2021. Pro forma EBITDA for 2020 should be $48-$52 million and in 2021 should exceed $53.9 million, the private equity company has said. 

AerSale’s strength during the virus crisis has been attributed to several factors, including strong demand its on-airport maintenance as well as passenger-to-freighter conversions. In 2020, AerSale bought 24 Boeing 757-200s for conversion.

Moreover, AerSale was well-positioned for the massive groundings of aircraft during 2020. It has desert aircraft parking facilities in Arizona and New Mexico that can store up to 650 aircraft. These sites offer preservation, on-site maintenance, tear-downs, documentation and asset management.

AerSale is also preparing for the recovery in air traffic. It is developing AerAware, a flight vision system that provides flight data and situational awareness on an Elbit Systems head wearable display. AerSale has already integrated AerAware on a Boeing 737-800NG.