January 16, 2015
Events heating up as AAC get closer to closing a deal on the sale of Telair
It was on December the 9th 2014, that it was first announced AAC Corp, headquartered in Wood Dale, Illinois were looking to sell Telair, a cargo-loading systems manufacturer it bought back in 2011 for US$280m together with Nordisk Aviation Products A S (Nordisk) from Teleflex Incorporated. This week AAC have announced that they want all bids for the company to be received by the end of the month or early February at the latest. Interested parties have included European private equity firms Cinven and EQT, and US companies including aerospace components maker Transdigm, US industrial conglomerate Honeywell, and also the aviation company, Triumph.
Currently it is anticipated the sale will achieve a figure in the region of US$800m, though some experts believe the value of Telair could exceed US$1bn. When the proposed sale was first announced the share price rose almost 7% to US$27.58, while this week the share price has risen from a low of US$25.47 to a closing price of US$27.07 on Thursday.
Telair is seen as an attractive purchase and investment to private equity bidders owing to its low capital expenditure and ability to free up cash quickly. Currently its annual core earnings (EBITDA) are about $US70m, so a tenfold plus return would not seem unreasonable. However there are major concerns for its many employees who fear that a sale to an industry player may result in heavy job cuts as was witnessed after TransDigm’s acquisition of a Telair unit back in 2010.