ORLANDO--Aviation Technical Services’s (ATS) last four acquisitions have been component repair businesses—the latest of which was American Cooler Service—but the MRO specialist does not aspire to become a Wencor or Heico, stresses Brian Hirshman, ATS president.
ATS’s strategy for growing its component MRO portfolio matches its merger and acquisition strategy, which is “to fill out complimentary areas to what we have today so we can expand our offering to customers," he tells MRO Network.
The American Cooler Service purchase fits that definition because it added heat-transfer capabilities, and all of the associated parts. It also brought in hydraulic, pneumatic, electrical, electromechanical and fuel-related parts, which combined represent about half of Arlington, Texas-based American Cooler’s business.
ATS already operates four other shops in the Dallas metroplex, so Hirshman expects to gain geographic synergies as well as an expanded customer base.
ATS has “one or two more companies in various stages of acquisition,” says Hirshman, “that I would consider active or actionable.” However, because no two deals are alike, he says they could close in one month or one year—or anywhere in between.
ATS, a private-equity backed company that partners with JLL Partners in New York, could acquire companies in the $5 million-$100 million range, but the sweet spot is the $20 million-$50 million range, says Hirshman, in part because smaller acquisition take as much effort as larger ones.
However, he stresses that any future acquisitions must be accretive to ATS’s overall business and serve its customers. “We’re not out there splashing money around or just trying to do deals for the sake of doing deals,” says Hirshman. “We’re very disciplined and patient,” and don’t participate in auction-type sales, he adds.
“We like to get to know the owners and the company and understand the cultural and strategic fit. So when we acquire it, the day after closing, we know exactly what we bought and exactly how it will fit into ATS,” he says.
Hirshman characterizes the market as “frothy” and “intensely competitive.”
ATS, which has about $300 million in annual revenue, according to COO Paul Dolan, derives 60% of its overall business from airframe heavy maintenance. About one-third of that 60% comes from its Kansas City operation—the rest from its Everett, Washington headquarters facilities.
Southwest Airlines is ATS’s largest customer but Dolan says the company has performed maintenance for each of the top five U.S.-based airlines in the past year, so its customer base is diversifying.