GREENWICH AIR Services plans to emerge as the world's largest engine-maintenance group, having signed a letter of intent to acquire Aviall's airline-engine repair and overhaul business.
News of the deal, which is being priced at around $260-280 million, came just days after Aviall put its engine-overhaul operations up for sale, citing losses on fixed-rate contracts and problems meeting debt payments.
"This acquisition will make Greenwich the world's largest engine-repair, maintenance and overhaul company," says chairman Eugene Conese.
Annual revenues will rise, from $196 million in 1995 to more than $750 million after the acquisition. Aviall will shrink to less than half its present size.
Miami, Florida-based Greenwich will acquire the assets of Aviall's engine-related business in Dallas, Fort Worth and McAllen, Texas, and the stock of Aviall Caledonian Engines Services, based in Prestwick, Scotland. Financing has still to be arranged, but the sale is expected to be completed in 1996.
Aviall will hold on to its parts-distribution business and Inventory Locator Service division and use the proceeds of the sale to repay debt. The company sold its helicopter and business-aircraft engine-overhaul and airline surplus-parts distribution businesses after being spun off from transportation company Ryder in 1993.
"We decided to sell the engine business to improve the long-term financial performance of the company," says Aviall chairman Robert Lambert. The decision came just weeks after a management shake-up which Lambert had said was "...designed to strengthen the company's airline-engine repair business."
Greenwich has grown rapidly since it acquired engine-overhaul company GTC from Chromalloy in April 1994. The company already services a wide range of General Electric, Pratt & Whitney and Rolls-Royce engines. The Aviall acquisition will give it the capability to overhaul the CFM International CFM56, GE CF6-80, P&W PW100 and International Aero Engines V2500.
Source: Flight International