Aviation services company AAR had sold off its landing gear overhaul business to GA Telesis for $51 million, the company said on December 20, 2024.
The divestiture of the non-core business segment is expected to close first quarter of next year. The transaction is part of the company's aim to optimise its portfolio and further invest in its core business practices that will “accelerate its targeted growth and margin expansion initiatives”. The company said the divestiture will immediately improve both its margins and earnings.
“This transaction will increase our operating margins, improve our cash flow and enable us to reallocate resources to drive further growth in our core businesses,” said AAR chairman, president and CEO John Holmes. “We are confident GA Telesis will continue to deliver excellent service to the landing gear customers.”
The landing gear business is based in Miami, Florida, and is part of the company's repair & engineering segment. AAR will remain prime contractor for the United States Air Force landing gear performance based logistics contract, and the current maintenance services will be continued by GA Telesis as a subcontractor.
GA Telesis said the transaction will “significantly expand" its workforce and boost its service provision capabilities for aircraft, including Airbus, Boeing, Bombardier, and Embraer platforms. The transaction will also bring high-velocity oxy-fuel coating capabilities to the company's portfolio. This will enable it to support the durability of aircraft components.
"Expansion of our landing systems capabilities will have a profound impact on addressing the capacity constraints that our existing customers are facing,” said GA Telesis MRO Services president Pastor Lopez. “The integration of the new business units with GA Telesis’ existing landing gear business unit will lead to better operational efficiency for our airlines globally.
GA Telesis CEO and president Abdol Moabery said the transaction will allow the company to further expand the company's ecosystem.
CIBC Capital Markets served as AAR's financial advisor and Jones Day served as AAR's legal advisor in the transaction.