Dubai Aerospace Enterprise (DAE) has signed a definitive agreement to fully acquire Macquarie AirFinance for an approximate enterprise value of $7bn.
DAE will add 37 new airline customers to its portfolio, including seven new country exposures upon closing.
Macquarie's fleet consists of 352 commercial aircraft, including future commitments, leased to 83 airline customers across 48 countries.
The combined company will have a pro forma fleet of 1,029 owned, managed, and committed aircraft — serving 191 airlines in 79 countries. Additionally, around 70% of the combined fleet will comprise of narrowbodies.
The deal will be funded with a combination of debt and equity. The lessor said this approach will support its current investment grade ratings and its goal of being upgraded. The company has doubled its franchise over the past 18 months to support this aim.
DAE is rated BBB from Fitch and Baa2 from Moody's, with a stable outlook from both agencies.
Macquarie is rated BBB- from Fitch and Baa3 from Moody's, both with stable outlooks.
DAE CEO Firoz Tarapore said the deal will create a “bigger, stronger, more diversified, and well-capitalized" leasing company.
“Our increased scale and presence, along with an enhanced order book, will allow us to serve an additional number of customers with competitively priced offerings that reflect the synergies associated with our new scale,” said Tarapore.
“Over nearly 20 years, we have built a resilient, high-performing aircraft leasing platform, defined by deep industry experience, strong customer relationships and industry partnerships, disciplined transaction execution, and a long-term commitment to excellence,” said Macquarie AirFinance CEO Eamonn Bane.
“The value reflected in this transaction underscores the strength of our portfolio, the depth of our relationships with customers, OEMs, and our financiers, and the dedication of our global team."
The transaction has been approved by DAE's board and is expected to close in the second half of this year, following regulatory approvals.
Allen Overy Shearman Sterling and KPMG advised DAE on the deal.
JP Morgan Securities and Macquarie Capital acted as financial advisors to Macquarie AirFinance.
