AAR has entered into a definitive agreement to acquire a 65% controlling interest in MRO Holdings at an implied enterprise value of $4 billion, significantly expanding the company’s aviation aftermarket platform and adding more than $1 billion in annual revenue from a business serving major U.S. airline customers.
The transaction values MRO Holdings at approximately 10.7x its forecast 2026 adjusted EBITDA, including $75 million of anticipated run-rate cost synergies and transaction-related tax benefits with an estimated present value of approximately $150 million.
MRO Holdings is a global aircraft maintenance, repair, and overhaul provider with approximately 10,000 employees and 115 lines of airframe maintenance capacity across facilities in the United States, El Salvador, Mexico, and Colombia. Approximately 90% of its revenue comes from U.S. customers.
AAR expects the combination to create what it describes as the largest heavy maintenance MRO operation in the world, servicing nearly 3,000 aircraft annually across the combined company’s hangars. The increased scale is also expected to generate additional opportunities across AAR’s component repair, OEM distribution, and aviation software businesses.
For calendar year 2026, MRO Holdings is expected to generate approximately $1 billion in revenue and $285 million in adjusted EBITDA, representing an adjusted EBITDA margin of approximately 27%. The business converted approximately 70% of adjusted EBITDA into adjusted operating cash flow in calendar 2025.
On a pro forma basis, the acquisition is expected to increase AAR’s adjusted EBITDA margin from approximately 12% to 16% before synergies, representing an improvement of roughly 400 basis points compared with AAR’s standalone fiscal 2026 performance.
AAR expects approximately $75 million of run-rate cost synergies from operational optimization, procurement savings, SG&A efficiencies, and shared operating practices. The company expects to realize the full benefit within three to four years after closing and has raised its adjusted EBITDA margin target to approximately 19% to 20% over that period.
Under the agreement, AAR will initially pay an equity value of approximately $1.8 billion for the 65% stake and repay approximately $1.3 billion of MRO Holdings’ existing debt.
AAR expects to finance the transaction with approximately $2.1 billion of new debt, approximately $780 million of AAR equity issued at $135 per share to existing MRO Holdings shareholders, and approximately $230 million from a PIPE financing led by The Pritzker Organization and other institutional investors.
AAR will also have options to acquire the remaining 35% of MRO Holdings. A 5% interest can be purchased at any time within six years of the initial closing, while the remaining 30% can be acquired in three equal 10% tranches on the second, third, and fourth anniversaries of closing.
The company expects net leverage of approximately 3.6x at closing, including run-rate synergies, declining to approximately 3.0x within two years and eventually returning to its target range of 2.0x to 2.5x.
The transaction is expected to close during AAR’s fiscal third quarter ending February 2027, subject to regulatory approvals and customary closing conditions. AAR’s board unanimously approved the deal, and the company expects to fully consolidate MRO Holdings into its financial results after closing.
Support: Goldman Sachs, William Blair, and Centerview Partners are serving as financial advisors to AAR, while Solomon Partners and RBC Capital Markets are advising MRO Holdings. Goldman Sachs Bank USA and Wells Fargo Securities are supporting the debt financing.
KEY QUOTES:
“Through the acquisition of MRO Holdings, we will create the largest heavy maintenance MRO in the world, servicing a combined total of nearly 3,000 aircraft per year in our hangars. As a result of this scale, we expect to drive additional volume through our Component MRO facilities, we will have a much larger channel for new and existing OEM distribution relationships, and we will have additional avenues for data collection supporting our software business.”
“While the strategic benefits are significant, the acquisition of MRO Holdings also greatly enhances our financial profile. The acquisition further strengthens our ability to generate above-market sales growth, and we see a path to 20% adjusted EBITDA margins in the next three to four years.”
John M. Holmes, Chairman, President and CEO of AAR
“This is a major milestone in MRO Holdings’ evolution, and AAR is the right partner. Combining our technical expertise and customer relationships with AAR’s broader aftermarket capabilities will strengthen our value proposition and support continued investment in our people, capabilities, and facilities.”
Roberto Kriete, Chairman of MRO Holdings
