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New owner for StandardAero

Dubai Aerospace sells to N.Y.-based Veritas Capital

Hey there, time traveller!
This article was published 27/5/2015 (818 days ago), so information in it may no longer be current.

StandardAero has another new private-equity-firm owner.

Dubai Aerospace Enterprises has sold the aerospace maintenance, repair and overhaul (MRO) firm, whose largest operational centre is in Winnipeg, to a unit of New York-based Veritas Capital.

Work underway at StandardAero's Winnipeg plant. The operation here employs about 1,200 staff.


Work underway at StandardAero's Winnipeg plant. The operation here employs about 1,200 staff.

Dubai Aerospace Enterprises (DAE), acquired StandardAero and Phoenix-based Landmark Aviation in 2007 from the Carlyle Group.

That deal was reported to have valued the StandardAero portion at just over $1 billion.

Shortly after DAE acquired StandardAero, its head office and management team moved to the Phoenix area.

'Without a doubt, StandardAero's greatest asset is its world-class employee base' -- Veritas managing partner Ramzi Musallam

StandardAero is the world's largest independent gas turbine engine MRO firm. Its sprawling Winnipeg operation has about 1,200 employees, down slightly from a couple of years ago.

Landmark does airframe and engine MRO as well as avionics and interior refurbishing of mid-sized and heavy aircraft, with several facilities in the U.S.

Terms of the Veritas transaction were not disclosed.

The deal is the first acquisition for Veritas Capital Fund V, a $1.8-billion fund. The early indication is Veritas will keep current management and staff in place.

In a statement, Ramzi Musallam, managing partner of Veritas, said, "We are very excited for the opportunity to partner with (CEO) Russell Ford and his leadership team to help drive its next phase of growth, including expanding the company's presence globally. Without a doubt, StandardAero's greatest asset is its world-class employee base, and we look forward to building upon the strong foundation created by this talented organization over its 100-plus-year history."

It's StandardAero's fourth change of ownership in 17 years, all in private-equity deals.

Arguably, each time, the firm has grown in size and relative market presence.

StandardAero officials both in Winnipeg and at its Scottsdale head office are optimistic the latest deal will allow it to continue to grow.

Ford, the Scottsdale-based StandardAero CEO, released a statement saying, "StandardAero is excited to move on to the next phase of ownership for the company and a new partnership with Veritas Capital... StandardAero is fundamentally a very strong business, and this change in ownership will ensure that we continue to achieve our business plans and build an aggressive trajectory for growth."

Ken Webb, executive director of the Manitoba Aerospace Association, said StandardAero has been through these kinds of deals in the past and each time it has grown and prospered.

"StandardAero is fundamentally a very strong company and had always contributed to DAE's bottom line," Webb said. "Any time a company is bought and sold there is a certain amount of uncertainty but also positive expectations. Each time in the past it has turned out StandardAero has prospered and grown."

Mike Scott, StandardAero's chief financial officer, who is based in Winnipeg, said, "We are excited about the next chapter in our long history and tradition of success for StandardAero and the Winnipeg operations."

Veritas does not seem to be as large or as high-profile as StandardAero's previous owners. In operation since 1998, Veritas has keyed on middle-market companies that provide products, services or solutions to government customers.

One industry source said he was surprised to see Veritas was the buyer as it seemed like a larger deal than ones it has done in the past.

"It seems like it might be a tad out of their league," he said.

In his statement Musallam said, "StandardAero is a cornerstone investment of Veritas Capital Fund V and creates a new strategic platform for Veritas in commercial and military aerospace."

It has been rumoured for a few years that DAE was looking to sell StandardAero.

Private equity firms do deals with the hope of either eventually reselling the company for a higher multiple of earnings, or with the intention of growing the company and increasing its profitability.

It seems the latter scenario is at play here.

Read more by Martin Cash.


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Updated on Wednesday, May 27, 2015 at 8:15 AM CDT: Replaces photo, formats fact box

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