AAR to acquire 65% of Bain-backed MRO Holdings in $1.8bn deal
Aviation services company AAR has agreed to acquire a 65% stake in Bain Capital-backed aircraft maintenance provider MRO Holdings for approximately $1.8bn, in a deal that will see the the PE firm retain an interest in the business, according to a report by the Wall Street Journal.
Aviation services firm AAR has reached an agreement to acquire a 65% share in MRO Holdings, an aircraft maintenance provider backed by investment firm Bain Capital, for roughly $1.8 billion, according to the Wall Street Journal. Bain Capital will continue to hold a stake in the company after the deal, which includes an option for AAR to purchase the remaining 35% within six years of the closing date.
MRO Holdings, headquartered in Wood Dale, Illinois, operates maintenance and modification facilities in the United States, Mexico, El Salvador, and Colombia. Approximately 90% of the company's revenue comes from US customers, primarily airlines. In 2024, Bain Capital invested in MRO Holdings, joining the family of founder Roberto Kriete and Caoba Capital as minority investors.
As part of the new transaction, both Bain and other existing investors will retain shares in AAR, allowing them to maintain exposure to MRO Holdings. AAR is expected to issue about $780 million of its own stock to MRO's investors as part of the deal.
Founded in 1955, AAR operates in aircraft parts distribution, as well as maintenance, repair, and overhaul services. The acquisition aims to expand AAR's maintenance capacity and geographic reach, while increasing its exposure to the growing demand for aircraft servicing. AAR's shares have increased by around 30% over the past year, driven by stronger demand for aircraft parts distribution.
The company anticipates the MRO transaction to enhance profitability, with an expected Ebitda margin range of 19% to 20% within three to four years following completion, compared to the current range of 13% to 14%.
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