AAR Announces Agreement To Acquire Triumph Group's Product Support Business, A Leading Provider Of MRO Services To The Global Aviation Aftermarket For $725M In Cash
Portfolio Pulse from Benzinga Newsdesk
AAR CORP. (NYSE:AIR) has agreed to acquire Triumph Group's (NYSE:TGI) Product Support business for $725 million in cash. The acquisition is expected to scale AAR's repair capabilities, be accretive to margins, expand the customer base and global footprint, and generate cost synergies of $10 million. Triumph Product Support is anticipated to bring in $280 million in revenue and $55 million in EBITDA by March 31, 2024. The deal, expected to close in Q1 2024, is supported by a bridge facility and may include a mix of debt and equity for financing. AAR aims for a pro forma net leverage of approximately 3.0x at closing.
December 21, 2023 | 1:02 pm
News sentiment analysis
Sort by:
Ascending
NEUTRAL IMPACT
Triumph Group is selling its Product Support business to AAR for $725 million in cash. The sale will affect Triumph's portfolio and financials, potentially leading to a strategic refocus or debt reduction.
While the sale provides Triumph with a significant cash infusion, the impact on the stock price is uncertain without knowing the company's plans for the proceeds. The short-term effect could be neutral as investors assess the implications of the divestiture.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 70
POSITIVE IMPACT
AAR's acquisition of Triumph Product Support is expected to enhance its repair capabilities, improve margins, and expand its customer base and global presence. The deal is anticipated to be accretive to revenue growth and Adjusted EPS in the first full fiscal year post-acquisition.
The acquisition is directly related to AAR's core business and is expected to be financially beneficial, indicating a positive short-term impact on AIR's stock price. The deal is likely to be viewed favorably by investors as it promises revenue growth and cost synergies.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90