AAR Corp. buys 65% stake in MRO Holdings for $4B

By Greg Peters • Tuesday, September 29 10:50 • Permanent Link

AAR Corp. said it will buy a 65% controlling stake in MRO Holdings in a deal that values the aircraft maintenance company at $4.0 billion and immediately expands AAR’s revenue base by more than $1 billion.

The transaction lifts AAR’s consolidated adjusted EBITDA margin to about 16% before synergies, from roughly 12% on a standalone basis, a gain of about 400 basis points. AAR then expects margins to rise further to 19% to 20% within three to four years as it captures about $75 million in annual run-rate cost synergies.

MRO Holdings is expected to generate about $1.0 billion in sales and $285 million in adjusted EBITDA in calendar 2026, implying a 27% adjusted EBITDA margin. The company also converts about 70% of adjusted EBITDA into adjusted cash flow from operating activities, based on 2025 results.

AAR said the acquisition will create the largest heavy-maintenance MRO operation in the world, with a combined total of nearly 3,000 aircraft serviced per year. MRO Holdings brings about 10,000 employees and 115 lines of airframe maintenance capacity across facilities in El Salvador, Mexico, Colombia and the U.S.; roughly 90% of its revenue comes from U.S. customers.

Under the deal, AAR will initially pay about $1.8 billion for the 65% stake and assume repayment of roughly $1.3 billion of MRO Holdings debt. AAR said it plans to finance the transaction with about $2.1 billion of new debt, roughly $780 million of equity issued at $135 per share to existing MRO Holdings shareholders, and about $230 million from a PIPE investment.

AAR expects net leverage at closing to be about 3.6x, including run-rate synergies. It said leverage should fall to about 3.0x within two years and return to a target range of 2.0x to 2.5x over the medium term, even as it exercises its options to buy the remaining 35%.

The company said the acquisition should be accretive to adjusted EPS in its first full fiscal year after closing, which it expects in fiscal third quarter 2027. Today the company's shares have moved -0.88% to a price of $115.09. For more information, read the company's full 8-K submission here.

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