Aircraft leasing companies continue to trade above valuations, with AWAS commanding a premium of at least 1.15x, according to a source who worked on the deal.

The battle for AWAS's platform concluded on 24 April with shareholders Terra Firma and Canadian Pension Plan Investment Board announcing Dubai Aerospace Enterprise as the winner in the contest for the Dublin-based aircraft leasing company. DAE paid $7.15 billion, according to a source who worked on the deal.

The transaction, which is still needs regulatory approval, is expected to close in the third quarter.

AWAS was put up for sale at the start of 2017 by majority shareholders Terra Firma and CPPIB, who hired Goldman Sachs to run the process. Having received a total of 17 bids in the first round - most for the platform and a few unconventional - the platform was sold to DAE allowing the Dubai-based leasing company to more than triple its fleet in one-fell-swoop to 305 aircraft in service, according to Flight Fleets Analyzer.

It is understood that the competitive process included a joint bid from Macquarie and Ping An that was closer to par, according to a source wishing to remain anonymous.

For comparison, Avolon paid an implied price-to-book value multiple of approximately 1.2x based on allocated equity of $3.3 billion. But Avolon was also purchasing CIT's orderbook, while AWAS only has 23 aircraft on order.

Terra Firma's CEO, Guy Hands said in a statement: “I’m delighted with today’s announcement and believe this is the right time for Terra Firma to realise maximum value for our investors."

Hands adds in his statement that Terra Firma's exit from AWAS began in 2015 with a two-part disposal, with an asset-backed sale of 30 older aircraft and the sale of an 84 aircraft portfolio to Macquarie Group with a vision to "optimise the business’s portfolio size ahead of the final exit".

Terra Firma reportedly rejected a bid from HNA Group in early 2016, for a 10% premium.

However, patience and commitment to the sales process paid off with Terra Firma and CPPIB eventually earning a higher multiple than offered by the Chinese last year.

Source: Cirium Dashboard