17th Feb 2021 08:58
(Alliance News) - Signature Aviation PLC on Wednesday said it has agreed to sell its engine repair & overhaul business to Scottsdale, Arizona-based peer StandardAero for USD230 million.
The aviation services company headquartered in London said it will receive about USD140 million in net proceeds after fees and price adjustments, which it will deploy in line with its target of keeping net debt at no more than 2.5 to 3.0 times underlying earnings before interest, tax, depreciation and amortisation.
Signature Aviation classified its engine repair & overhaul business as held for sale within its discontinued operations following a strategic review in 2018. The business is an engine service provider to global business and general aviation operators, the rotorcraft industry and regional airline fleets, it added.
The company said the business reported underlying Ebitda for the 12 months to December 31, 2019 of USD29.1 million net of support costs, while gross assets were USD358.1 million. Support costs of USD11.4 million for 2019 are to remain with Signature Aviation, while it works to remove the costs upon legal completion of the transaction or following completion of transition services.
"We are committed to delivering long-term sustainable value for shareholders and this sale focuses us on Signature Aviation our strong cash generative business," said Chief Executive Mark Johnstone.
Earlier this month, Signature Aviation said it recommended a takeover offer by newly formed acquisition vehicle Brown Bidco Ltd, consisting of US-based private equity firm Blackstone and former suitor Global Infrastructure Partners. The consortium also includes Cascade Investment LLC, a fund which manages Bill Gates's investments.
The offer valued Signature at USD4.73 billion, about GBP3.46 billion. If everything goes to plan, the Brown Bidco takeover will be sealed in the second quarter of 2021.
Shares in Signature Aviation were up 0.4% at 405.50 pence in London on Wednesday.
By Zoe Wickens; [email protected]
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