(Alliance News) - BBA Aviation PLC on Tuesday that it has agreed to sell its aerospace parts and services unit Ontic to CVC Fund Vll, managed by private equity firm CVC Capital Partners, for an enterprise value of USD1.37 billion.
The aviation support and aftermarket services provider said it expects to return between USD750 million and USD850 million of that to shareholders.
Shares in BBA Aviation were trading 5.7% higher at 321.60 pence each, the best performer in the FTSE 250 index of London mid-caps.
BBA Aviation said the sale is unanimously supported by the board as being in the best interests of shareholders and will enable enhanced focus and investment in the company's Signature flight support services business.
"The Ontic disposal will allow BBA to focus on its core Signature business, the leading global FBO operator and service provider for the B&GA market. BBA shareholders will continue to benefit from Signature's ability to outperform the B&GA market through the cycle, as well as Signature's ability to take advantage of its significant opportunities for future growth," said BBA Aviation Chief Executive Mark Johnstone.
FBO refers to a fixed-base operator, which is an organization providing aeronautical services such as fuelling and aircraft parking services. B&GA refers to business and general aviation travellers.
"The Engine Repair & Overhaul unit disposal process is ongoing and we expect to update the market in due course. Disposal proceeds would provide an opportunity to further enhance our proposed return of capital," Johnstone added.
At 2018 end, Ontic had gross assets of USD567.6 million and generated underlying operating profit of USD59.3 million.
The sale is expected to close in the final quarter of 2019, subject to shareholder and other approvals.
