AerCap’s purchase of ILFC is in line with the Amsterdam-based lessor’s steady growth strategy as well as ongoing efforts to boost its share price.
Although the lessor has avoided speculative aircraft orders recently, today’s purchase of ILFC marks AerCap’s second large portfolio purchase in the past five years.
The lessor agreed to acquire Genesis Lease in a $300 million all-stock merger of the aircraft leasing companies in 2009. Genesis became a wholly-owned subsidiary of AerCap in 2010 as part of the $1.75 billion deal.
ILFC comes equipped with more than $20 billion in orders, including key aircraft such as the Boeing 787 and Airbus A350.
It has been no great secret in the finance community that AerCap, which is backed by private equity heavy weights Waha Capital and Wellington Management, has been frustrated with its stock price.
The lessor disclosed in regulatory files in May 2012 that its board of directors hired Goldman Sachs to "explore a range of strategic alternatives to enhance shareholder value, including continued execution of operating strategies, further share repurchases, aircraft portfolio sales or a sale or merger of the company."
Goldman Sachs acted as sole financial advisor to AerCap in the purchase of ILFC.
Sources speculate AerCap’s long-term goal could be to finally take the lessor private from a public entity, following the purchase of ILFC.
AerCap, say sources, has been studying the possibility of going private as another option in its effort to deal with its undervalued stock price. A private lessor, source say, would allow for greater flexibility in achieving fleet and financing plans.
The acquisition of ILFC also follows a notable change in AerCap’s shareholding. Private equity firm Cerberus Capital Management, through its affiliate Fern Sarl, sold approximately 8.2 million ordinary shares in AerCap, reducing its stake in the lessor to less than 0.1% in March 2013.