BBA Aviation eyes Landmark Aviation deal

Houston, Texas-based Landmark Aviation, that provides engine maintenance, fix and overhaul and nose-to-tail services for private aircraft is in talks to be acquired by British aircraft services company BBA Aviation.

It was a “transformational and strategically compelling transaction for BBA Aviation”, the company said, which would enable a “major expansion” of its Signature network.

“We remain concerned about the outlook for the business aviation market, and BBA is significantly increasing its exposure to it with this deal”, Liberum analysts said in a note.

There would be “substantial cost synergies and tax benefits”, the company added, with enhanced earnings per share forecast as early as 2017 and return on capital expected to exceed the costs by 2018.

The deal will be funded by new debt and a rights issue that will raise about £748 million.

BBA’s chief executive Simon Pryce said the acquisition would be used to extend BBA’s flight services brand globally.

J.P. Morgan Cazenove, Jefferies global Ltd, Barclays Bank Plc and HSBC Bank Plc are the underwriters for the rights issue.

BBA is participating in a sale process for Landmark Aviation, which is owned by private equity firm Carlyle and has attracted several bidders, including buyout firms. Landmark Aviation’s website states that it offers a wide range of services, including FBO, MRO, aircraft management and charter across 68 locations in the U.S. , Canada and western Europe.