Key Takeaways
- • AAR (NYSE: AIR) agreed to acquire a 65% controlling interest in MRO Holdings at an implied enterprise value of $4.0 billion, or 10.7x MRO Holdings' forecasted 2026 adjusted EBITDA including $75 million of run-rate cost synergies.
- • MRO Holdings adds more than $1 billion in revenue and is expected to generate about $285 million of adjusted EBITDA in calendar 2026, a roughly 27% margin, lifting AAR's pro forma adjusted EBITDA margin before synergies from about 12% to about 16%.
- • AAR's initial 65% stake carries an equity value of about $1.8 billion, with approximately $1.3 billion of MRO Holdings debt repaid; funding includes about $2.1 billion of new debt, about $780 million of equity issued at $135 per share, and about $230 million from a PIPE led by The Pritzker Organization.
- • AAR expects net leverage of about 3.6x at closing, falling to about 3.0x within two years, and targets an adjusted EBITDA margin of roughly 19% to 20% within three to four years.
- • The deal is expected to close in AAR's fiscal third quarter ending February 2027, subject to regulatory approvals; the remaining 35% stake is subject to purchase options exercisable over six years.
Summary
AAR announced on September 28, 2026 that it has entered into a definitive agreement to acquire a 65% controlling interest in MRO Holdings, a Wood Dale, Illinois-based aviation aftermarket company, at an implied enterprise value of $4.0 billion, according to the company's press release. The price equates to 10.7x MRO Holdings' forecasted full calendar 2026 adjusted EBITDA, including $75 million of anticipated run-rate cost synergies and net of transaction-related tax benefits with an expected present value of approximately $150 million.
MRO Holdings is a global provider of aircraft maintenance, repair, and overhaul with more than four decades of experience, approximately 10,000 professionals, and 115 lines of airframe maintenance capacity. Its facilities are located in El Salvador, Mexico, Colombia, and the United States, and roughly 90% of its revenue comes from U.S. customers. The company expects approximately $1.0 billion of sales and $285 million of adjusted EBITDA in 2026, and it converted about 70% of adjusted EBITDA into adjusted operating cash flow in calendar 2025. AAR CEO John M. Holmes said the combination would create the largest heavy maintenance MRO in the world, servicing nearly 3,000 aircraft per year.
Under the transaction terms, AAR will pay an equity value of approximately $1.8 billion for its initial 65% interest and repay about $1.3 billion of MRO Holdings' existing borrowings. Financing consists of approximately $2.1 billion of new debt, supported by a fully committed bridge facility that AAR intends to replace with permanent financing before closing; about $780 million of equity issued at $135 per share to existing MRO Holdings shareholders; and about $230 million from a PIPE led by The Pritzker Organization and other institutional investors. AAR will receive 100% of MRO Holdings' excess cash flow during the first two years of ownership and will control its Board of Managers. The remaining 35% interest may be acquired with 5% exercisable within six years of closing and 30% in three 10% tranches on the second, third, and fourth anniversaries.
On a pro forma basis, AAR's adjusted EBITDA margin before synergies is approximately 16%, about 400 basis points accretive to its standalone fiscal 2026 results, and the deal is expected to be accretive to adjusted EPS in the first full fiscal year after closing. AAR expects net leverage of about 3.6x at closing including run-rate synergies, approximately 3.0x within two years, and a return to its 2.0x to 2.5x target range over the medium term. The company expects to maintain its BB-category credit ratings at S&P and Moody's.
Goldman Sachs & Co. LLC, William Blair & Company, and Centerview Partners are financial advisors to AAR, with Kirkland & Ellis as legal counsel. Solomon Partners is lead financial advisor to MRO Holdings, with RBC Capital Markets also advising and Greenberg Traurig as legal counsel. Bain Capital, a significant minority shareholder in MRO Holdings, said it expects to participate in continued value creation as a shareholder. The transaction is expected to close in AAR's fiscal third quarter ending February 2027, subject to regulatory approvals, and the AAR board has unanimously approved it. AAR will discuss the deal and its first quarter fiscal 2027 results on a conference call on September 29, 2026.
MRO Holdings is a global provider of aircraft maintenance, repair, and overhaul with more than four decades of experience, approximately 10,000 professionals, and 115 lines of airframe maintenance capacity. Its facilities are located in El Salvador, Mexico, Colombia, and the United States, and roughly 90% of its revenue comes from U.S. customers. The company expects approximately $1.0 billion of sales and $285 million of adjusted EBITDA in 2026, and it converted about 70% of adjusted EBITDA into adjusted operating cash flow in calendar 2025. AAR CEO John M. Holmes said the combination would create the largest heavy maintenance MRO in the world, servicing nearly 3,000 aircraft per year.
Under the transaction terms, AAR will pay an equity value of approximately $1.8 billion for its initial 65% interest and repay about $1.3 billion of MRO Holdings' existing borrowings. Financing consists of approximately $2.1 billion of new debt, supported by a fully committed bridge facility that AAR intends to replace with permanent financing before closing; about $780 million of equity issued at $135 per share to existing MRO Holdings shareholders; and about $230 million from a PIPE led by The Pritzker Organization and other institutional investors. AAR will receive 100% of MRO Holdings' excess cash flow during the first two years of ownership and will control its Board of Managers. The remaining 35% interest may be acquired with 5% exercisable within six years of closing and 30% in three 10% tranches on the second, third, and fourth anniversaries.
On a pro forma basis, AAR's adjusted EBITDA margin before synergies is approximately 16%, about 400 basis points accretive to its standalone fiscal 2026 results, and the deal is expected to be accretive to adjusted EPS in the first full fiscal year after closing. AAR expects net leverage of about 3.6x at closing including run-rate synergies, approximately 3.0x within two years, and a return to its 2.0x to 2.5x target range over the medium term. The company expects to maintain its BB-category credit ratings at S&P and Moody's.
Goldman Sachs & Co. LLC, William Blair & Company, and Centerview Partners are financial advisors to AAR, with Kirkland & Ellis as legal counsel. Solomon Partners is lead financial advisor to MRO Holdings, with RBC Capital Markets also advising and Greenberg Traurig as legal counsel. Bain Capital, a significant minority shareholder in MRO Holdings, said it expects to participate in continued value creation as a shareholder. The transaction is expected to close in AAR's fiscal third quarter ending February 2027, subject to regulatory approvals, and the AAR board has unanimously approved it. AAR will discuss the deal and its first quarter fiscal 2027 results on a conference call on September 29, 2026.
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