AAR has entered a definitive agreement to acquire a 65 percent controlling interest in MRO Holdings at an implied enterprise value of 4.0 billion dollars, equivalent to 10.7 times MRO Holdings’ forecasted 2026 adjusted EBITDA including expected cost synergies. MRO Holdings is a four-decade-old aircraft maintenance, repair and overhaul provider with around 10,000 employees and 115 lines of airframe maintenance capacity across the Americas, with facilities in El Salvador, Mexico, Colombia and the United States, about 90 percent of its revenue coming from US customers. “Heavy maintenance is a foundational element of this platform, driving revenue to all other areas of the Company,” said John M. Holmes, AAR’s chairman, president and chief executive. “Through the acquisition of MRO Holdings, we will create the largest heavy maintenance MRO in the world, servicing a combined total of nearly 3,000 aircraft per year in our hangars.”

THE FINANCIAL PROFILE

MRO Holdings is expected to generate around 1.0 billion dollars in 2026 sales and 285 million dollars in adjusted EBITDA, a margin of roughly 27 per cent, with a cash-conversion rate of about 70 per cent in 2025. On a combined basis, AAR expects its adjusted EBITDA margin to rise from around 12 per cent to approximately 16 per cent before synergies, with some 75 million dollars in anticipated annual cost synergies from operations, procurement and shared best practices pushing that margin toward a targeted 19 to 20 per cent within three to four years.

HOW THE DEAL IS STRUCTURED

AAR will pay approximately 1.8 billion dollars in equity value for its initial 65 per cent stake and separately repay about 1.3 billion dollars of MRO Holdings’ existing debt, funding the transaction through roughly 2.1 billion dollars of new debt, about 780 million dollars of equity issued to existing MRO Holdings shareholders at 135 dollars a share, and around 230 million dollars from a private placement led by the Pritzker Organisation. AAR has the option to acquire the remaining 35 per cent over the following six years, and expects net leverage of about 3.6 times at closing, falling toward its 2.0 to 2.5 times target range over the medium term. The transaction is expected to close in AAR’s fiscal third quarter, ending February 2027, subject to regulatory approval.

REACTION FROM MRO HOLDINGS’ SHAREHOLDERS

“This is a major milestone in MRO Holdings’ evolution, and AAR is the right partner,” said Roberto Kriete, chairman of MRO Holdings, who, along with other existing owners, is staying on as a shareholder. “We are staying on as shareholders of MRO Holdings because we share AAR’s ambition for continued growth and want to be a part of it.” Matt Evans, a partner at Bain Capital, a significant minority shareholder in MRO Holdings, said: “MRO Holdings has built a differentiated offering with deep customer relationships, a highly skilled workforce, and a compelling position in a market supported by durable demand for aircraft maintenance. We believe AAR is an excellent partner for the company’s next chapter.”