#United States #AAR CORP #Wood Dale #Aviation Services #GA Telesis

AAR Corporation Announces Divestiture of Landing Gear Overhaul Unit

In a strategic move aimed at optimizing its business portfolio, AAR Corporation has decided to divest its Landing Gear Overhaul business, a non-core segment of its operations. The agreement, finalized with GA Telesis, values the transaction at an impressive $51 million, with the completion anticipated in the first quarter of 2025, contingent on customary and regulatory approvals.

Purpose of the Divestiture

This decision aligns with AAR's overarching strategy to concentrate on its primary functions that offer substantial growth potential and improved profit margins. The divestment is expected to generate immediate positive impacts on the company's earnings and margins, leading to a stronger overall financial position. John M. Holmes, AAR's Chairman, President, and CEO, emphasized that this move will enable the company to reallocate resources effectively, driving further growth across its core business segments.

AAR's Landing Gear Overhaul Business

The divested business is based in Miami, Florida, and forms part of AAR's Repair & Engineering segment. It has built a reputation for delivering comprehensive landing gear maintenance, repair, and overhaul services catering to both commercial and government entities. Notably, AAR will remain the prime contractor for the United States Air Force's Landing Gear Performance Based Logistics contract, ensuring that existing maintenance services will be continued by GA Telesis under subcontractor arrangements.

Insights from AAR’s Leadership

The leadership at AAR expresses confidence in the transaction, believing that GA Telesis will uphold the quality of service provided to Landing Gear customers. Holmes stated that this step is expected to bolster AAR’s operating margins and enhance cash flow, further fueling investment in high-potential core business functions. The strategic redirection of resources aims to sustain the company’s growth trajectory, particularly in a dynamic aviation market.

Advisors Involved in the Transaction

In this significant transition, CIBC Capital Markets acted as the financial advisor to AAR, while Jones Day provided legal counsel. The collaboration of these expert firms underscores the importance of achieving a successful execution of the divestiture and ensuring compliance with all applicable regulations.

About AAR Corporation

AAR Corporation is recognized as a global leader in the aerospace and defense aftermarket solutions sector, operating across more than 20 countries. The company, based in the Chicago region, serves a variety of clients, including commercial and government operations. Through its diverse segments – Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services – AAR is committed to delivering exceptional service and solutions to its customer base.

About GA Telesis

GA Telesis is a prominent name in aerospace solutions, noted for its unmatched finesse in aftermarket services and lifecycle management. The company boasts a vast operational ecosystem comprising 54 locations in 30 countries, providing an extensive range of services, including parts distribution, logistics, inventory management, and MRO solutions. GA Telesis's strategic approach emphasizes sustainability through innovative initiatives and advanced technologies, ensuring reliability and efficiency in service delivery.

As the aircraft maintenance and repair industry continues to evolve, AAR’s strategic divestiture of its non-core business illustrates its commitment to refining its focus and enhancing its competitive edge in the marketplace. The successful integration of GA Telesis into the maintenance framework is anticipated to create new opportunities while paving the way for AAR's sustained growth and profitability in its core sectors.