KKR invests $100 million into Lease Corporation International

AgustaWestland AW189 flying

Lease Corporation International is partnering with KKR for helicopter leasing.

An AgustaWestland AW189 helicopter flying

KKR Financial Holdings is investing more than $100 million in Lease Corporation International’s helicopter leasing subsidiary.

Other divisions of KKR have also invested in helicopter operator Avincis and Malaysia’s Weststar.

“We are pleased to be partnering with LCIH to help grow its helicopter leasing business,” said Craig Farr, CEO of KFN. “As a result of related experience through other KKR investments—both in the helicopter space and in the end-markets LCIH serves, such as offshore energy production—we believe the nascent helicopter leasing industry will offer attractive risk-adjusted returns to early entrants like LCIH in the years to come.”

LCI was founded in 2004 as a commercial aircraft leasing company leasing aircraft. In 2012 it also entered the helicopter leasing market when it placed a $400 million order with AgustaWestland for AW139, AW169 and AW189 helicopters. It has taken delivery of five helicopters – coincidentally going to Avincis-owned Bond Helicopters and Weststar, along with Thailand’s SFS Aviation – and will speed up deliveries in 2014.

“This transaction deepens our already significant commitment to the rotary wing sector of the aviation market,” said LCI CEO Michael Platt. “Our partnership with KKR Financial will provide us with future growth opportunities and further strengthen our position in the marketplace.”

Teneo Capital and Morgan Stanley advised LCI. This is the first time that LCI or its parent company Libra Group, a amily owned company, has worked with outside investors on joint ventures like this.

Crispin Maunder, chairman of LCI, says: “We did not need this cash to compete but it allows us to accelerate our growth.”