The deal values the aircraft-maintenance group at $4.0 billion and pays sellers partly in AAR stock, with options on the remaining 35% stretching out four years.
AAR is buying a controlling stake in aircraft-maintenance group MRO Holdings in a deal that gives its private-equity backers only part of their exit up front.
The aviation-services company agreed to acquire 65% of MRO Holdings at an implied enterprise value of $4.0 billion for the whole business. The equity value of the initial 65% stake is about $1.8 billion, and AAR will also repay about $1.3 billion of MRO Holdings' existing borrowings.
Checking the math
The figures reconcile neatly. An equity value of $1.8 billion for 65% implies about $2.77 billion for 100% of the equity. Add the roughly $1.3 billion of debt being repaid and the total comes to about $4.07 billion, in line with the stated $4.0 billion enterprise value.
The funding also balances. AAR is raising about $2.1 billion of new committed debt, underwritten by Wells Fargo Securities and Goldman Sachs Bank USA, issuing about $780 million of its own stock at $135 a share to existing MRO shareholders and raising about $230 million in a private placement led by The Pritzker Organization. Those sources total about $3.11 billion, matching the roughly $3.1 billion needed for the equity stake and the debt repayment.
A staged exit
The structure matters for the sellers. Bain Capital, which describes itself as "a significant minority shareholder" rather than the controlling owner, will not be fully cashed out when the deal is signed. Part of the consideration arrives as AAR shares, about 5.8 million of them at the $135 issue price, which ties sellers' proceeds to AAR's future performance.
The remaining 35% will change hands over time. AAR holds call options on 5% exercisable within six years and on 30% in three tranches of 10% each, on the second, third and fourth anniversaries of the deal. Other holders include founder Roberto Kriete's family and Caoba Capital.
Why sponsors accept this
Staged exits paid partly in stock are a way to close deals when buyers cannot or will not fund the full price in cash. For the sellers, the trade-off is time and exposure in exchange for a strategic buyer willing to pay a full valuation. For AAR, it spreads the cost of building a larger aftermarket platform over several years.
What to watch
The deal is expected to close in AAR's fiscal third quarter, which ends in February 2027, subject to regulatory approvals. After that, the performance of AAR's stock will determine how much the sellers ultimately realize on the shares they received.