AAR Corp Announces Divestiture of Landing Gear Overhaul Business to GA Telesis; Transaction Valued at $51 Million

On December 19, 2024, AAR Corp. (NYSE: AIR) entered into a definitive agreement to divest its Landing Gear Overhaul (LGO) business to GA Telesis for $51 million. The transaction is expected to close in the first quarter of 2025, subject to customary and regulatory closing conditions. AAR Corp. plans to utilize the proceeds from the transaction to repay outstanding amounts under its credit agreement.

As part of the strategic decision to exit the LGO business, AAR Corp. anticipates recognizing a non-cash, pre-tax loss of approximately $60 million in its fiscal third quarter ending February 28, 2025. This loss reflects the adjustment of LGO’s carrying value to its fair value less costs to sell. The company notes that the estimated pre-tax loss is subject to change as they continue evaluating the final amount.

A press release issued on December 20, 2024, announced the divestiture of the LGO business. The move is in line with AAR Corp’s strategy to optimize its portfolio by focusing on core functions to accelerate targeted growth and margin expansion initiatives.

The divestiture includes AAR’s Miami-based LGO business, which provides landing gear maintenance, repair, and overhaul services to commercial and government customers. AAR will remain the prime contractor for the United States Air Force Landing Gear Performance Based Logistics contract, and GA Telesis will take over the maintenance services as a subcontractor.

John M. Holmes, AAR’s Chairman, President, and CEO, stated, “This transaction will increase our operating margins, improve cash flow and enable us to re-allocate resources to drive further growth in our core businesses.” CIBC Capital Markets acted as AAR’s financial advisor, with legal advisory provided by Jones Day.

AAR Corp. is a global aerospace and defense aftermarket solutions company operating in over 20 countries. Headquartered in the Chicago area, the company supports commercial and government customers through various segments. GA Telesis, the acquiring entity, is known for its aftermarket services and lifecycle management solutions across the global aerospace industry.

This divestiture represents AAR Corp.’s strategic efforts to enhance operational efficiency and refocus resources for future growth initiatives. The decision aligns with the company’s commitment to optimizing its portfolio and investing in core activities for sustained long-term success.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read AAR’s 8K filing here.

About AAR

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Parts Supply segment leases and sells aircraft components and replacement parts. The Repair & Engineering segment provides airframe maintenance services, such as airframe inspection, painting, line maintenance, airframe modification, structural repair, avionics service and installation, exterior and interior refurbishment, and engineering and support services; component repair services comprising maintenance, repair, and overhaul (MRO) services, engine and airframe accessories, and interior refurbishment; and landing gear overhaul services, including repair services on wheels and brakes.