TGI - AAR announces agreement to acquire Triumph Group's Product Support business a leading provider of MRO services to the global aviation aftermarket | Benzinga
- Meaningfully scales AAR's repair capabilities and is highly complementary to existing portfolio
- Significantly accretive to margins and expands customer base and global footprint
- Expected run-rate cost synergies of $10 million
- Expected to be accretive to revenue growth and Adjusted EPS in the first full fiscal year
- Strong combined free cash flow expected to enable deleveraging
WOOD DALE, Ill., Dec. 21, 2023 /PRNewswire/ -- AAR CORP. (NYSE:AIR), a leading provider of aviation services to commercial and government operators, MROs, and OEMs, has entered into a definitive agreement with Triumph Group (NYSE:TGI) to purchase Triumph Product Support for $725 million in cash. As part of the transaction, AAR expects to receive estimated tax benefits with a present value of approximately $80 million. Including the estimated tax benefits, the effective purchase price multiple is expected to be 11.7x FY2024 EBITDA and 9.9x including estimated run-rate synergies of $10 million.
Triumph Product Support is a leading global provider of specialized maintenance, repair, and overhaul capabilities for critical aircraft components in the commercial and defense markets. The company provides MRO services for structural components, engine and airframe accessories, interior refurbishment, and wheels and brakes. Additionally, Triumph Product Support designs proprietary designated engineering representative (DER) repairs and Parts Manufacturer Approval (PMA) parts.
Triumph Product Support services both the commercial and military aftermarkets across five primary locations with a highly skilled workforce of over 700 employees. The business is projected to generate approximately $280 million of revenue and $55 million of EBITDA, representing an EBITDA margin of 20%, in its fiscal year ending March 31, 2024.
"Today we are very excited to announce the execution of an agreement with Triumph to ...