Aviation services company BBA Aviation has announced its decision to sell its original equipment manufacturer (OEM) division Ontic to CVC Capital Partners.
The London-based private equity firm agreed to buy Ontic for $1.37 billion, a sale which will allow BBA to focus on its Signature Flight Support business, said the company.
“While maintaining a strong balance sheet, we also expect to return between $750 million and $850 million to shareholders and will evaluate how best to structure this return after consultation with our shareholders,” said BBA CEO Mark Johnstone.
BBA acquired Ontic themselves in 2006 for $67 million and grew the business by absorbing parts manufacturing licenses and through organic growth.
“It now supports more than 39,000 legacy aircraft through its portfolio of over 165 licenses for more than 7,000 parts and over 1,200 customers worldwide,” said Johnstone.
The deal for Ontic, which develops OEM-licensed parts for legacy aircraft as well as providing MRO services, is expected to conclude in the fourth quarter, after regulatory and shareholder approvals.
“Ontic is a growing, highly resilient business and a leading player in what we believe to be a very attractive market,” said James Mahoney, senior managing director of Luxembourg-based CVC Capital.
“We see multiple opportunities to develop the business further and look forward to working closely with Ontic’s excellent management team to take the company to the next level.”