BBA Share News (BBA)

(ShareCast News) - Aviation support and aftermarket services company BBA Aviation announced on Friday that, after a number of approaches and a formal review, it has reached agreement with John Menzies on the terms of the sale of commercial aviation services subsidiary ASIG for $202m cash.The FTSE 250 firm said Menzies is funding the acquisition through raising additional debt and equity and, in addition to customary approvals, the transaction will require the approval of its shareholders.As a result of that process, the disposal is expected to close around the end of 2016.BBA described ASIG as "the world's leading independent refueller", employing approximately 8,000 people and providing ground, fuel and airport facility services to airlines, airports, oil companies and industry partners in the commercial aviation sector."It safely delivers flexible and comprehensive service solutions including refuelling, fuel farm management, ground handling, aircraft technical support services, facilities equipment maintenance and de-icing, with considerable technical expertise at more than 80 airports in North America, Central America, Europe and Asia," BBA's board said in the announcement.ASIG's EBITDA for the twelve months to 31 December 2015 was $31.9m, and its underlying and statutory profit before tax was $20.3m and $17.9m respectively, while the value of the gross assets at 30 June 2016 was $255.6m.The transaction's gross consideration of $202m is expected to deliver approximately $160m of net proceeds after tax, professional transaction fees, and other costs, which BBA will use to reduce group borrowings."As part of the transaction, BBA Aviation will provide transitional services to Menzies for support services for a six month period following closing," the board said."After adjusting for costs of providing the transitional services, foreign exchange reserves write-off, and other charges, the transaction will realise a loss on disposal in the region of $15m."The board said it will look to reduce the $20m ongoing support costs previously allocated to ASIG by at least half during the 12 months following transition at a one-off cost of around $5m. "As part of our continuing emphasis on delivering long-term, sustainable value for shareholders, after receiving a number of approaches and going through a detailed process, we are pleased to announce the sale of ASIG to Menzies to create a focused and larger, broad based global supplier of commercial aviation services," said BBA Aviation group chief executive Simon Pryce."This disposal further enhances BBA Aviation's focus as a high quality, strongly cash generative market leader in the provision of business and general aviation and legacy support services."