DAE To Sell StandardAero to Private Equity Firm

Dubai Aerospace Enterprise (DAE) is focusing on its leasing and local activities with the sale of maintenance, repair and overhaul heavyweight StandardAero to private equity firm Veritas Capital. The company announced in late May it had reached agreement to sell 100 percent of StandardAero to Veritas.

The definitive agreement comes eight years after DAE acquired the company from The Carlyle Group in 2007 as part of a $1.9 billion deal that involved the eventual spinoff of what is now the Landmark Aviation chain of FBOs.

DAE, only a year old at the time, had called the acquisition an important step in its goal of establishing itself as an aerospace power, enabling it to take advantage of MRO growth opportunities around the world. But within three years there was chatter that DAE was looking to shop StandardAero. A year later, in 2011, DAE sold its 30-percent stake in MRO provider SR Technics to Mubadala. DAE later acknowledged it was in talks with BBA Aviation about a potential merger with StandardAero, but those negotiations ultimately collapsed when the parties were unable to come to terms.

Terms of the private transaction to Veritas were not disclosed. Veritas is acquiring one of the largest independent MRO and completions providers catering to business and general aviation, commercial and defense markets, with 13 facilities and 50 sales and field service locations. StandardAero brings in annual revenue of $1.6 billion, forming the majority of DAE’s overall revenue of $2.112 billion.

DAE profits jumped 43 percent last year, a result of not only improved margins at StandardAero but also an expansion of its leasing business, the company had reported. DAE managing director Khalifa AlDaboos said the sale to Veritas “will allow StandardAero to accelerate its growth by leveraging Veritas’s global relationships and in-market presence.” In turn, the sale will enable DAE to “redeploy capital” to focus on building its Dubai-anchored footprint and acquiring aircraft assets in its leasing portfolio, which is now approaching $3.7 billion, AlDaboos added.

Veritas invests primarily in middle-market companies with a focus on half a dozen or so industries, including aerospace. Veritas managing partner Ramzi Musallam said StandardAero will become a cornerstone investment of its recently established Veritas Capital Fund V and create a platform for its investment in commercial and military aerospace. “We are excited for the opportunity to partner with StandardAero’s leadership team to help drive its next phase of growth, including expanding the company’s presence globally,” Musallam said. 

“StandardAero is fundamentally a strong business, and this change in ownership will ensure that we continue to achieve our business plans and build an aggressive trajectory for growth,” said StandardAero CEO Russell Ford.

Moelis & Co advised DAE on the sale.