Aftermarket M&A Activity Buoyant in 2019

The aviation aftermarket is booming and businesses in the sector have been hot commodities in the eyes of the financial world for several years. This showed no signs of changing in 2019--a year that saw a raft of buyouts and mergers.

Private equity money continued to pour into the sector, picking up from where it left off at the end of 2018 when StandardAero, something of a private equity darling, was acquired by private equity finance for the second time in 15 years. As a signal of the company’s growth over the 15-year period, Carlyle paid around $5 billion for the company the second time around--dwarfing the $670 million it paid in 2004. The investment giant had previously broadened its aftermarket investments by helping to take Nordam out of a Chapter 11.

In Europe, APU and landing gear specialist Revima was snapped up by private investment house Ardian. The change in ownership didn’t alter the ambitious MRO’s course. In February, one month after it was acquired, it bought out the site of Chromalloy France to bolster its APU repairs and Flight Watching, a specialist in data analytics for predictive maintenance.

Other European aftermarket companies snapped up by private equity firms include AerFin, the UK-based end-of-life aircraft specialist, which was acquired by Danish fund CataCap, while another British company, Farsound Aviation, was bought by AGIC Capital in July.

Earlier this month, AerSale announced it plans to go public in a merger-sale with public investment vehicle Monocle Acquisition Corp., with the deal expected to close in the first half of 2020.

MROs buying other MROs also occurred. STS Aviation Group, which was the recipient of private equity investment from Greenbriar Equity Group this year, made in-roads into Europe through the acquisition Apple Aviation. Shortly after it added the former Monarch Aircraft Engineering hangar in Birmingham to its burgeoning operation on the continent.

Sabena Technics meanwhile acquired French heavy maintenance provider EAS Services. The business holds A320, A330, A340 and 737 approvals, and the company plans to add 757 and 767 certifications.

The intent of OEMs in the services segment also gathered further pace. In a year its commercial aircraft division would otherwise want to forget, Boeing continues to gain some positives in its aftermarket activities.

Having closed the acquisition of parts distribution specialist KLX last year, the giant also took on an 80% stake in Embraer's commercial aircraft division.

Could there yet be one more deal for the year to end on? Media speculation last week suggested Airbus could be among the buyers for Swiss MRO provider SR Technics. The European aircraft maker has so far been conservative in its acquisitions, instead, focusing on developing platforms such as Skywise data analytics.

However, SR Technics’ Chinese owner, HNA Group, has offloaded several of its Western assets and it looks likely it may do the same for the MRO before too long. Don’t be surprised to see a potential suitor revealed in the near future.


James Pozzi

As Aviation Week's MRO Editor EMEA, James Pozzi covers the latest industry news from the European region and beyond. He also writes in-depth features on the commercial aftermarket for Inside MRO.