Why did you acquire InTech Aerospace in 2014?
Ranger Aerospace has been a “serial acquirer” since early 1997. We’ve had some substantial successes such as ASIG, Keystone Helicopter, Composite Technology and Ranger International Services Group (RISG). Now in our 20th year, we had the ability to oversee, grow and transform two unrelated aerospace services “platform” companies at once, along with our increasing ability to assemble heavy capitalization for our deals. So, after profitably divesting the large 1,200-person RISG to a strategic buyer a few years ago, we put up the radar for middle-market sized acquisition candidates. After reviewing at least a dozen, we homed in on InTech—I had known that excellent company for about 25 years, when it was known as Aerospace Interiors. We liked what we found, as the beginning basis for a multi-year growth plan in specialty interiors MRO for commercial airliners of all sizes. We’ve done a lot so far, in partnership with InTech’s leadership team, to improve and grow the business to a new level. It’s now poised with good momentum to potentially be a vehicle for add-on acquisitions. InTech is the type of lower middle-market company that can flourish to a higher level of critical mass and customer/technical capabilities with steady internal investments, on top of which we’re now quietly searching for related acquisitions.
What are the key differentiators that separate InTech from other FAA Part 145 specialty interior repair facilities?
The main drivers for success are people, location and technical depth. Houston is strategically centered for North American and Latin American air carriers, making it easier for Intech to deploy to and from various locations, plus centralized shipping of components or entire shipsets. The craftsmanship of the work teams is buttressed by AS-9110 quality standards and LEAN initiatives in our various shops. All this contributes to efficient turnaround times and competitive pricing from our 60,000 sq. ft. repair station. InTech can do just about any MRO tasks from the cockpit door to the aft pressure bulkhead.
What is InTech’s plan for the rest of 2017 and beyond?
Intech is reaching out as a potential strategic partner to additional large MRO companies that view Intech as an “adjunct interiors department.” Those companies’ highly paid technicians and mechanics are doing major work such as engines, avionics, rotables and heavy maintenance—Intech takes the interiors headache out of the equation. At the same time, Ranger Aerospace is scouting for complementary acquisitions. Not “clones” but “first cousins” to InTech, with the goal of creating a larger basket of integrated interiors capabilities and airframe channels, focusing on deeper technical differentiation in the eyes of customers.
Where do you see InTech in five years, and how is InTech adapting to changing commercial aircraft interiors?
InTech Aerospace will continue investing in additional technical capacities for new materials and quality enhancements. For example, we have built new capabilities for e-leather, composites and plastics. Commercial interiors now emphasize special lighting inflight entertainment, slim line seats and other creature comforts to expand on the customer experience. We follow those developments and we will keep budgeting internal investments at InTech to keep pace with airlines’ requirements. We also are planning one or two distant operating footprints for Intech, partnered with and embedded in or near large MRO sites for very large airlines and/or the huge MRO providers. This is an attractive pitch to those types of organizations, wherein we invest in what we do best, a ready resource alongside their huge maintenance centers. Stay tuned for that type of maneuver from InTech Aerospace.
The other, larger company that Ranger acquired, ACL Airshop, has repair stations doing MRO on cargo control products such as pallets, containers and nets. Where are you going with that company?
ACL Airshop is an interesting enterprise. Ranger tried very hard to acquire ACL back in the year 2000, when we were growing Aircraft Service International Group (ASIG) to a global scale at 56 airports. It would have been a great fit with ASIG’s array of airport services operations and airlines clients, but the deal didn’t happen at the time. Fast-forward 16 years, we kept in touch with the owners of ACL Airshop annually, and finally found a way to acquire it in early 2016. It was three times larger than its earlier version and growing steadily. ACL Airshop manufactures/sources, sells, leases, repairs, and logistically controls fleets of cargo control products (ULDs) such as pallets, containers and other mission-critical devices. ACL’s most dominant niche is renting or leasing these products on a short-term to medium-term basis when airlines need more in a pinch, or in peak load periods. We also have longer-term programs that include an available set of logistics management services and analytics for ULD fleet efficiency. ACL Airshop had 28 hub locations when we started together last year; we now have 40, plus additional manufacturing and supply chain resources. We have FAA/EASA repair stations in six locations now, the newest is near Narita Tokyo Airport (the largest air cargo hub in all of Japan). We have two more repair stations in-work, planning for certifications sometime soon at Hong Kong and Bogota. Long-term, I believe we will expand ACL Airshop to as many as 75-80 major hub airports, with up to 80,000 ULDs in our own fleet. Plus some additional strategically located repair stations, with our entire network linked and coordinated with an electronic backbone of sophisticated software and communications investments on behalf of our hundreds of airlines clients.