In a move further highlighting the buoyant M&A environment of the aviation aftermarket, the acquisition of aircraft maintenance and modifications specialist Sabena Technics was finalized this week with the company being sold to a consortium of funds who will now become the company’s majority shareholders.
Sabena’s parent company TAT Group confirmed the sale on June 13 to the investment consortium comprised of three entities: French investment bank Bpifrance, Sagard, the Paris-based private equity arm of Power Corporation of Canada and British-U.S. investment company TowerBrook.
The deal was first mooted in December 2018 subject to regulatory approvals. Under the new ownership structure, TAT will retain a minority shareholding but Sabena’s management structure has undergone some adjustments. Rodolphe Marchais, current chairman of TAT, will take over the presidency of Sabena’s supervisory board. Philippe Rochet, Sabena’s chief operating officer, will become the executive CEO and shareholder of the group.
TAT first acquired Sabena, which used to operate as the maintenance division of former Belgian airline Sabena, back in 2005.
The company has remained competitive as an independent MRO provider in Europe’s saturated aftermarket, focusing mostly on heavy maintenance services and increasingly so, in modifications work. Last year, it generated a turnover of approximately €450 million ($507 million) in 2018 and has previously confirmed its goal of increasing revenue to €600 million in 2021.
Despite some notable private equity-MRO misfires, notably the collapse of Monarch Aircraft Engineering, the aviation aftermarket remains an attractive proposition to private equity companies in the U.S. and Europe. In the past year, Engine repair specialist StandardAero was sold to asset management company The Carlyle Group for around $5 billion. Following this, Carlyle invested in family-owned component manufacturing and repair company Nordam after funding the business out of its Chapter 11 bankruptcy.
Speculation suggests SR Technics could also be attracting the overtures of asset management company Blackstone, which is exploring the MRO segment having raised more than $22 billion from investors for its latest private equity fund earlier this year.