StandardAero to acquire Signature Aviation’s engine repair business for $230m

Mike Stones

MRO provider StandardAero is to acquire Signature Aviation’s Engine Repair and Overhaul (ERO) business for $230m after the two companies signed a definitive agreement.

StandardAero chairman and CEO Russell Ford said: “ERO is a terrific and complementary fit for StandardAero, expanding our portfolio with more volume of the engines we support today, while also growing our service base with a significant number of new engine platforms and customers.”

Russell added: “Like StandardAero, ERO is OEM-aligned and has a long history of outstanding service and customer satisfaction.  With this acquisition, StandardAero will achieve significant cost and operational efficiencies and will continue on pace to become one of the preeminent MRO companies in the world.”

The transaction is expected to close mid-2021, subject to regulatory approvals.

Based in Dallas, Texas, ERO employs about 1,100 people and last year reported annual revenue of around $500m. The business operates two overhaul facilities, one in Dallas and the other in Portsmouth, UK, 10 regional turbine centres, one component MRO site and two parts/distribution facilities. Its customers include: regional airlines, commercial transportation providers, corporate flight departments, private operators, government agencies and defence departments.

10 turbine centres

The structure of the company includes five groups:  Dallas Airmotive, H&S Aviation, W.H. Barrett Turbine Engine Company, International Governor Services (IGS) and International Turbine Service (ITS).

ERO offers MRO services for most turbine engine models powering fixed and rotary wing aircraft used for business aviation. It also caters for many of the engines used in government, military and commercial applications.

The acquisition will significantly expand StandardAero’s capabilities for providing MRO services for various Pratt & Whitney, Honeywell, Rolls-Royce and General Electric platforms, according to the company.

New capabilities

It will also bring new capabilities to StandardAero’s MRO portfolio including services for PW200, PW500, Spey & Tay engines and PW901 APUs (auxillary power units). The deal is further expected to expand StandardAero’s component repair capabilities, parts distribution channels and mobile field services for combined customers.

Signature Aviation CEO Mark Johnstone said: “We are pleased that we have reached agreement to sell our ERO business to StandardAero, where we believe the business will continue to flourish. We are committed to delivering long-term sustainable value for shareholders and this sale focuses us on Signature Aviation our strong cash generative business.”

The ERO was classified as ‘held for sale’, after a strategic review in 2018.

Lazard is acting as financial advisor to Signature Aviation on the transaction and Jones Day is acting as legal adviser.

Meanwhile, last month Corporate Jet Investor reported Signature Aviation had received a $3.4bn offer from Global Infrastructure Partners (GIP).

 

The acquisition of ERO will also bring new capabilities to StandardAero’s MRO portfolio.

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