Could Unical Acquisition Signal The Start Of More M&A Activity?
The great wave of aviation consolidation anticipated isn’t expected to pick up until at least the end of 2021 according to some industry figures, yet companies in the sector continue to attract interest from private equity finance sensing opportunities.
The latest of these businesses attracting this type of investment is U.S.-based group Unical Aviation, a supplier of new and used serviceable material parts based out of San Bernardino International Airport in California. Last month it was confirmed that Los Angeles-based Platinum Equity had acquired the company, with the deal formally completed this week.
All units of the business are included in the purchase agreement except for Unical Defense, which undertakes defense work for the U.S. government.
The units changing hands include the company’s Unical MRO arm, which supports Boeing, Airbus and Bombardier aircraft platforms and undertakes checks up to C-check level. It also offers parking and storage for aircraft, along with end-of-life services that include scrapping and recycling.
Also included is the Unical Part 145 business, which oversees parts, aircraft structure and landing gear repairs, and Unical Aero, which engineers, certifies and manufactures FAA-PMA/STC approved aircraft parts and systems.
Unical will continue to operate as a standalone operation, Platinum Equity says, with its operations executive Dori Konig acting as interim CEO during the transition.
Platinum Equity was founded in 1995 and the company’s website says it has more than $25 billion worth of assets under management and a portfolio of approximately 40 operating companies. Its aviation assets include Fort Worth, Texas-based lncora, an aerospace and defense supply chain service provider.
The Unical deal follows a relatively quiet 2021 for industry M&A. William Alderman, president and founder of middle-market investment bank Alderman & Co., stated earlier this year at PNAA’s Annual Aerospace Conference that depressed values and a reluctance to sell at 2020 peak-crisis prices will account for slow M&A activity this year.
Nevertheless, confidence remains that consolidation will occur once the market recovery picks up, and it is private equity that was cited by consultancy Oliver Wyman earlier this year as being one of the sectors that will likely account for the “new money” entering the aviation industry.
This money is expected to be spread around most of the aftermarket. Jonathan Berger of Alton Aviation Consultancy told Aviation Week at the start of 2021 that he believes private equity firms will be interested in all aftermarket segments: line, airframe, components and engine maintenance.