An airliner on the apron in front of the lit Aeroman maintenance hangar in El Salvador at dusk, photographed in June 2010 · Rodrigo Flores, via Wikimedia Commons · CC BY 3.0

Article · 2026-09-30 · 7 min read · Aircraft maintenance and parts · Stocks

AAR strikes a $3 billion deal for control of MRO Holdings

The aircraft parts and repair company agreed on 28 September to buy 65 percent of a heavy-maintenance business that logs more hangar hours than its own, with hangars in El Salvador, Mexico, Colombia and the United States; its filings put the cost at about $3.0 billion with the repayment of the target's debt, funded by about $2.1 billion of new borrowing and by new shares equal to 19.9 percent of its stock, against $879.6 million of long-term debt at the end of August.

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What AAR signed

AAR, the Illinois company that sells aircraft parts and repairs airliners, said on Monday 28 September that it had agreed to acquire 'a 65% controlling interest in MRO Holdings at an implied enterprise value of $4.0 billion'. The agreement, filed the next day, has AAR buying 6,500 shares, 65 percent, of the Panamanian holding company for an estimated $1,819,174,310 in cash and 5,783.894 shares of a new non-voting convertible preferred stock with an agreed value of $780,825,690, both subject to adjustment for debt, cash and working capital at closing. ^{[2, 1]}

AAR's quarterly report, filed the same day as the agreement, states the whole cost: 'approximately $3.0 billion including the repayment of $1.3 billion of MRO Holdings' existing borrowings'. Closing is expected in AAR's fiscal third quarter, which ends in February 2027, once regulators approve. The deal does not depend on AAR raising the money. If competition approvals fail, AAR owes the sellers $100,000,000, or $150,000,000 if it has used its right to move the deadline from 28 September 2027 to 28 March 2028. ^{[3, 1]}

What it is buying

MRO stands for maintenance, repair and overhaul: the heavy checks in which an airliner is opened up in a hangar for weeks. AAR's release describes MRO Holdings as having 'approximately 10,000 professionals and 115 lines of airframe maintenance capacity' in El Salvador, Mexico, Colombia and the United States, and says 'approximately 90% of MRO Holdings' revenue is from sales to U.S. customers'. The company's own site names its units: Aeroman in El Salvador, Flightstar in Jacksonville, Florida, TechOps MX in Queretaro, North State in Winston-Salem and Rionegro MRO in Colombia. ^{[2, 6, 8]}

AAR expects MRO Holdings to make about $1.0 billion of sales in calendar 2026 and $285 million of adjusted EBITDA, a company's own measure of operating profit before interest, tax and depreciation. AAR's sales in the quarter to 31 August were $918.0 million, with net income of $40.1 million. Its presentation counts the combination as going 'from 7 to 12 facilities', 'from 7M to 19M annual service hours' and from about 1,200 to nearly 3,000 aircraft a year, which makes the business being bought the larger of the two by hangar hours. The chief executive, John Holmes, said: 'we will create the largest heavy maintenance MRO in the world'. ^{[2, 3, 4]}

The sellers stay in. Roberto Kriete, MRO Holdings' chairman, said: 'We are staying on as shareholders of MRO Holdings because we share AAR's ambition for continued growth'. Matt Evans of Bain Capital called his firm 'a significant minority shareholder'. Private Equity Wire, citing the Wall Street Journal, reported that Bain invested in 2024 alongside the Kriete family and Caoba Capital. ^{[2, 7]}

How it is paid for

With borrowed money and new shares. The quarterly report lists 'approximately $2.1 billion of new debt, approximately $780 million of our equity issued to existing MRO Holdings shareholders, and approximately $230 million of proceeds from a private investment in public equity (PIPE) offering', a private sale of shares that the release says is led by The Pritzker Organization. The debt is 'supported by a fully committed bridge facility, which AAR intends to replace with permanent debt financing prior to closing'. AAR's long-term debt at 31 August was $879.6 million, including $185.0 million drawn on its revolving credit facility, so the new borrowing is more than twice what it owed. ^{[3, 2]}

The share count moves too. The preferred stock converts at a ratio of 1 to 1,000, into 5,783,894 common shares, and the private placement is 2,215,791 common shares, expected to close on 1 October. Together that is 7,999,685 new shares, 19.9 percent of the 40,194,211 outstanding at 31 August. The sellers may not transfer theirs for 18 months, with a third freed after six months and two thirds after twelve, and must vote with AAR's board during a standstill period. ^{[5, 1, 3]}

AAR gives the debt load in its own measure, net leverage: debt less cash as a multiple of a year's adjusted EBITDA. It 'expects net leverage at closing to be approximately 3.6x, including run-rate synergies', about 3.0 within two years, and 'to maintain its BB-category credit rating profile at each of S&P and Moody's'. Its quarterly report puts the risk plainly: 'We currently have a significant amount of debt and expect to incur additional debt in connection with the Acquisition', and if the committed financing 'is not available, we may remain obligated to complete the Acquisition'. Its average borrowing rate on the revolving facility was 5.34 percent in the quarter. ^{[2, 3]}

Who controls what

After closing MRO Holdings is run by a board of eight managers, five named by AAR and three by the sellers, whose consent is needed for a list of matters that includes borrowing that would take MRO Holdings' leverage past 4.0 times. The agreement 'will restrict all distributions to the members until the second anniversary of the Closing', and the release says 'AAR will receive 100% of the excess cash flow from MRO Holdings during its first two years of ownership'. ^{[1, 2]}

AAR can buy the rest: 5 percent at any time, and the remaining 30 percent in three tranches of 10 percent on the second, third and fourth anniversaries. The price is a formula, MRO Holdings' adjusted EBITDA of the prior twelve months times 'the greater of 13.5x and the ratio of the Company's enterprise value to its last-twelve-months adjusted EBITDA, subject to a cap of 15.25x'. If AAR has not bought by the sixth anniversary, the sellers can start a sale of the business. And while the sellers own units, AAR may not build or buy heavy maintenance facilities in Latin America or the Caribbean except through MRO Holdings. ^[1]

What settles it next

The private placement's closing, expected on 1 October, and the registration of those shares, which AAR must file for within 30 days after it. The permanent debt that replaces the bridge, which AAR intends to raise before closing. The regulators' approvals, for which the documents give no date. Closing itself, expected in the quarter that ends in February 2027, against a deadline of 28 September 2027. ^{[1, 2]}

Who it reaches

AAR directly, as the buyer, the borrower and the issuer of the new shares. Goldman Sachs and Wells Fargo as the banks that, by AAR's release, underwrite the committed debt. MRO Holdings' customers are described only as 'blue-chip, U.S. airline customers', and neither the agreement nor the release names one, so no airline is tagged here. Bain Capital, the Kriete family and The Pritzker Organization are private. ^{[2, 1, 7]}

Sources

Every stock is a company; the desk grades the company behind the stock. This article describes; it does not recommend. Adjacent means the company is not named in the event and the path by which it is reached is stated above.

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