AAR accelerates aftermarket strategy by acquiring controlling interest in MRO Holdings

AAR  announced it has entered into a definitive agreement to acquire a 65% controlling interest in MRO Holdings at an implied enterprise value of $4.0 billion. This represents 10.7x MRO Holdings’ forecasted full calendar year 2026 adjusted EBITDA, including $75 million in anticipated run-rate cost synergies and net of transaction-related tax benefits with an expected present value of approximately $150 million. The transaction will expand and strengthen AAR’s leading aviation aftermarket platform and create significant additional growth opportunities across the Company’s core Parts, Repair, and Software activities. The combination creates advantages for AAR’s customers as the Company will offer a broader range of maintenance solutions. MRO Holdings is a global provider of aircraft maintenance, repair, and overhaul (MRO) with more than four decades of experience. Through its team of approximately 10,000 professionals and 115 lines of airframe maintenance capacity, MRO Holdings performs aircraft maintenance and modifications across its extensive network in the Americas, with facilities in El Salvador, Mexico, Colombia, and the United States. Approximately 90% of MRO Holdings’ revenue is from sales to U.S. customers. “Over the last several years, AAR has taken important steps to reshape our portfolio into an integrated Parts, Repair, and Software aviation aftermarket platform,” said John M. Holmes, Chairman, President and CEO of AAR. “Heavy maintenance is a foundational element of this platform, driving revenue to all other areas of the Company. 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. As a result of this scale, we expect to drive additional volume through our Component MRO facilities, we will have a much larger channel for new and existing OEM distribution relationships, and we will have additional avenues for data collection supporting our software business. In addition, we see more growth opportunities for the heavy maintenance business itself, including widebody maintenance and increased capture of European and Middle Eastern fleets for service in the Americas.” In calendar year 2026, MRO Holdings is expected to generate approximately $1.0 billion of sales and $285 million of adjusted EBITDA, representing an adjusted EBITDA margin of approximately 27%. MRO Holdings also has an exceptional cash flow conversion profile, converting approximately 70% of adjusted EBITDA into adjusted cash flow from operating activities in calendar year 2025. Holmes continued, “While the strategic benefits are significant, the acquisition of MRO Holdings also greatly enhances our financial profile. The acquisition further strengthens our ability to generate above-market sales growth, and we see a path to 20% adjusted EBITDA margins in the next three to four years. Further, the cash generated by the combination of AAR and MRO Holdings will be substantial, allowing the Company to quickly de-lever and retain future financial flexibility. With greater scale and a stronger financial profile, AAR will be better positioned to deliver higher, more profitable growth across our Parts, Repair, and Software platform.” “This is a major milestone in MRO Holdings’ evolution, and AAR is the right partner,” said Roberto Kriete, Chairman of MRO Holdings. “Combining our technical expertise and customer relationships with AAR’s broader aftermarket capabilities will strengthen our value proposition and support continued investment in our people, capabilities, and facilities. Together, MRO Holdings and AAR create a stronger platform with greater scale, deeper technical resources, and a broader ability to serve the world’s leading airlines. 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.” Under the terms of the agreement, AAR will initially acquire a 65% interest in MRO Holdings for an equity value of approximately $1.8 billion. As part of this initial transaction, AAR will also repay approximately $1.3 billion of MRO Holdings’ existing borrowings. AAR expects to fund the transaction, including related expenses, through approximately $2.1 billion of new debt, approximately $780 million of equity issued at $135 per share to existing MRO Holdings shareholders, and approximately $230 million of proceeds from a private investment in public equity (PIPE) offering, led by The Pritzker Organization and other blue-chip institutional investors. AAR will have the option to acquire the remaining 35% ownership interest of MRO Holdings with 5% exercisable at any time within six years of the closing of the initial Acquisition, and the remaining 30% exercisable in three equal tranches of 10% on the second, third, and fourth anniversaries of the closing of the initial acquisition. AAR will control the MRO Holdings Board of Managers, and the selling owners will be subject to customary lockups and voting-support provisions with respect to the AAR shares they receive in the transaction. The approximately $2.1 billion of new debt financing is supported by a fully committed bridge facility, which AAR intends to replace with permanent debt financing prior to closing. AAR expects net leverage at closing to be approximately 3.6x, including run-rate synergies. As part of the agreement, AAR will receive 100% of the excess cash flow from MRO Holdings during its first two years of ownership. AAR expects net leverage to be approximately 3.0x within two years following close of the transaction and to return to its target range of 2.0x to 2.5x over the medium term, even as we exercise the purchase options. AAR expects to maintain its BB-category credit rating profile at each of S&P and Moody’s. The transaction is expected to close in AAR’s fiscal third quarter ending February 2027, subject to receipt of regulatory approvals and satisfaction of other customary closing conditions. The Board of Directors of AAR has unanimously approved the transaction. Following closing, AAR will fully consolidate MRO Holdings into its financial results. For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Sally Passey at [email protected]