Dubai Aerospace ready for acquisitions after sale of US unit

Dubai Aerospace is set to embark on the acquisition trail after selling a major maintenance business in the US.

The Dubai aviation company said yesterday that it sold its Arizona-based aviation services unit, StandardAero, to the private equity firm Veritas Capital.

DAE bought StandardAero from Carlyle Group in 2007.

While DAE did not disclose the value of the sale, Reuters estimates the transaction could be valued at about $1.8 billion.

DAE said it would “redeploy capital and refocus its efforts on building an aerospace footprint anchored in Dubai”.

DAE, which came into being in 2006, was created to support Dubai’s growth as an aerospace hub and boost the emirate in the aircraft leasing business.

“We will focus on both organic and inorganic opportunities,” said the managing director Khalifa AlDaboos. “DAE Capital will also aggressively acquire aircraft assets to expand its aircraft leasing portfolio with a current net book value of $3.7bn,” he added.

StandardAero provides engine maintenance, repair and overhaul for commercial and military aircraft.

“StandardAero is one of the world’s largest independent MRO platforms with clients in over 70 countries,” said Mr AlDaboos. “This transaction will allow StandardAero to accelerate its growth by leveraging Veritas’ global relationships and in-market presence,” he added.

Moelis & Company and Freshfields Bruckhaus Deringer advised DAE on the deal.

Last month, DAE reported a 43 per cent increase in its net profit for 2014, as its operations continued to recover since the global financial crisis.

The Dubai-based government enterprise achieved a net profit of Dh586 million for 2014, compared to Dh410m a year earlier.

The company scaled back its expansion plans after the 2008 financial crisis, cancelling several high-profile orders, with many senior executives leaving in 2011. But by November 2013, the company was taking delivery of three Boeing 777-200 freighters, which have been placed under long-term lease with Emirates.

In 2014, DAE ordered 40 aircraft from the French-Italian manufacturer ATR in a deal worth $988m. Deliveries are scheduled between 2015 and 2018.

DAE has two divisions: engineering, which maintains, repairs and overhauls aircraft; and capital, which is the region’s leaser of aircraft.

DAE’s shareholders include Investment Corp of Dubai, Dubai International Capital, Dubai Silicon Oasis Authority, Istithmar World and Emaar Properties.

Follow The National’s Business section on Twitter

Share This Post