DAE and BBA Aviation Talk Combination

 - August 28, 2013, 11:05 AM

Dubai Aerospace Enterprise (DAE) has confirmed that it is in talks with UK-based aircraft services group BBA Aviation over a possible merger with its U.S. engine repair and overhaul business StandardAero. Neither company has given any further details as to how the merger would work. DAE acquired both StandardAero and Landmark Aviation from The Carlyle Group in August 2007 for a reported $1.9 billion. The acquisition was part of an aggressive growth mode for the Dubai-based organization as it positioned itself in the aerospace industry by developing six divisions: airports, capital, engineering, manufacturing, services and university.

StandardAero was seen as a logical choice to be an integral part of the company’s maintenance, repair and overhaul business. The company provided a variety of gas turbine engine and accessory MRO and engineering services to regional airlines, military, business aviation, helicopters and energy/industrial operators in more than 75 countries.

At the time, DAE touted the acquisition as the opening move by a new, major player in the international maintenance industry. The company subsequently invested in a $5.5 million expansion of StandardAero’s Maryville, Tenn. facility to provide MRO services for the PW600-series engines designed to power very light jets. Pratt & Whitney Canada had awarded PW600 designated overhaul facility status to StandardAero earlier that year.

In November 2007, DAE signed a deal with Encore FBO and private-equity firm GTCR Golder Rauner to sell off Landmark Aviation’s FBOs for $436 million so DAE could focus on the MRO business.

In December 2010, following the financial crisis in the United Arab Emirates, DAE put StandardAero on the auction block and retained Deutsche Bank to advise on the sale. The auction was spurred by a declining economy in Dubai and the Gulf Arab emirate’s efforts to pay off a reported $100 billion-plus debt by selling its tightly controlled companies. Nothing came of the auction but at the time a spokesman for StandardAero told AIN he didn’t think it was noteworthy, saying, “DAE is an investment company that commonly looks at its strategic options for its investments. StandardAero will continue to focus on what it does best, providing world-class maintenance, repair and overhaul services to operators around the world.”