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Dubai Aerospace explores StandardAero sale - sources

February 23
10:54 PM 2015

Dubai Aerospace Enterprise Ltd, an aircraft leasing and maintenance company controlled by the government of Dubai, is looking to sell its aviation services unit, StandardAero, for more than $1.8 billion, according to people familiar with the matter.

Dubai Aerospace Enterprise is working with investment bank Moelis & Co (MC.N) on an auction for StandardAero that is expected to start later this year, the people said on Monday.

The sources asked not to be identified because the deliberations are not public. StandardAero and Moelis declined to comment. A DAE representative did not respond to a request for comment.

Scottsdale, Arizona-based StandardAero provides engine maintenance, repair and overhaul, and nose-to-tail services that include airframe, interior refurbishments and paint for commercial and military aircraft.

In 2007, state-owned DAE simultaneously purchased aircraft maintenance services company Landmark Aviation and StandardAero from buyout firm Carlyle Group LP (CG.O) in a joint transaction valued at $1.8 billion. DAE sold Landmark Aviation to private equity firms GTCR LLC and Platform Partners a year later.

This is not the first time that StandardAero has been put up for sale by DAE. In 2010, DAE hired Deutsche Bank AG (DBKGn.DE) to help sell StandardAero, sources told Reuters at the time. The failed sale took place during a nascent upturn in the aerospace after market.

In August 2013, BBA Aviation Plc (BBA.L) and DAE announced they were in discussions to merge some of their assets. Those talks ended in September of that year, the companies said.

Dubai, a regional financial and trade hub, established DAE in February 2006. Through several acquisitions, the company has grown into a global aerospace giant with operations ranging from aircraft leasing to manufacturing to engineering.

The company struggled as funds dried up during Dubai's 2009 debt crisis, but has rebuilt its fortunes since, thanks in part to StandardAero, DAE managing director Khalifa al-Daboos told Reuters in a December interview. DAE was expected to report a higher profit for 2014 than the $410 million it recorded last year, Daboos said.

In that interview Daboos told Reuters StandardAero should post a double-digit percentage growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2014.

Two of the sources said on Monday that the trailing 12 month EBITDA for StandardAero was around $180 million.

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