WOOD DALE - AAR Corp (NYSE: NYSE:AIR), an aviation services provider with a market capitalization of $2.1 billion, has struck a deal to sell its Landing Gear Overhaul business to GA Telesis for $51 million. The transaction, which is part of AAR's strategy to focus on its core businesses and enhance growth, is expected to close in the first quarter of 2025, pending regulatory approvals. According to InvestingPro data, AAR's revenue grew by 16% in the last twelve months, with the company currently trading slightly below its Fair Value.
This divestiture includes the Miami-based Landing Gear Overhaul operation, which offers maintenance, repair, and overhaul services to commercial and government clients. Despite the sale, AAR will continue as the prime contractor for the U.S. Air Force Landing Gear Performance Based Logistics contract, with GA Telesis acting as a subcontractor to maintain services. The company maintains a strong financial position, with InvestingPro analysis showing a healthy current ratio of 3.06, indicating robust liquidity to meet short-term obligations.
AAR's Chairman, President, and CEO John M. Holmes expressed confidence in GA Telesis' ability to uphold high-quality service standards for the landing gear customers. He stated that the sale would improve AAR's operating margins and cash flow, allowing for the reallocation of resources to drive further growth in their core businesses.
CIBC (TSX:CM) Capital Markets and Jones Day advised AAR on the financial and legal aspects of the deal, respectively.
AAR, headquartered near Chicago, operates in over 20 countries and supports commercial and government customers through various segments including Parts Supply, Repair & Engineering, Integrated Solutions, and Expeditionary Services.
GA Telesis is recognized for its comprehensive aerospace solutions and lifecycle management services. Their global network, known as the GA Telesis Ecosystem™, spans 54 locations across 30 countries. The company is committed to sustainability and efficiency through advanced technologies and a robust MRO network.
The announcement includes forward-looking statements regarding future business opportunities and the expected benefits of the divestiture. However, these are subject to risks and uncertainties that could cause actual results to differ from expectations. For deeper insights into AAR's financial health and future prospects, investors can access comprehensive analysis through InvestingPro, which offers exclusive ProTips and detailed financial metrics for over 1,400 US stocks.
This article is based on a press release statement from AAR Corp.
In other recent news, AAR Corp. has settled a Foreign Corrupt Practices Act case for $55.6 million, resolving allegations related to transactions in Nepal and South Africa. The company has also secured global distribution agreements with Whippany Actuation Systems and Chromalloy. Benchmark, an analyst firm, has maintained its Buy rating on AAR shares, citing the company's recent contract achievements and the ongoing integration of Triumph Products.
In parallel, Archer Aviation Inc (NYSE:ACHR). has formalized a partnership with key entities in Abu Dhabi to initiate the first commercial electric air taxi operations in the Emirate and establish a manufacturing presence in the MENA region. Archer is set to become the first eVTOL manufacturer in the region.
These are recent developments that have taken place, providing investors with highlights from the aviation industry. Both AAR Corp. and Archer Aviation Inc. have shown strong performance in their respective areas, with AAR Corp. demonstrating its financial health and Archer Aviation Inc. advancing in the field of sustainable transportation.
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