AAR to Acquire $1.8 Billion Controlling Stake in MRO Holdings, WSJ Reports

Aviation services provider AAR Corp. (NYSE:AIR) has agreed to acquire a 65% controlling stake in the privately held aircraft maintenance company MRO Holdings for $1.8 billion, according to a Wall Street Journal report citing people familiar with the matter. The deal marks a significant expansion for AAR, which provides products and services to the commercial aviation and government sectors.

Deal Structure and Terms

Under the reported terms, Wood Dale, Illinois-based AAR will issue approximately $780 million in new equity to MRO Holdings' current investors. These investors include private equity firm Bain Capital, the family of founder Roberto Kriete, and Caoba Capital. Bain Capital, which acquired a minority stake in MRO in 2024, will reportedly retain a position in the maintenance firm while also becoming an equity holder in AAR.

The agreement also includes an option for AAR to purchase the remaining 35% interest in MRO Holdings within six years after the transaction closes. This structure provides AAR a path to full ownership in the future.

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Strategic Rationale and Financial Impact

The acquisition is poised to significantly expand AAR’s operational footprint and enhance its profit margins. MRO Holdings operates maintenance and repair facilities across the United States and in lower-cost locations including Mexico, El Salvador, and Colombia. Despite its Latin American presence, approximately 90% of MRO's revenue is generated from U.S. commercial airline customers, giving AAR immediate scale in key service markets.

According to the report, AAR anticipates the deal will elevate its EBITDA margins to a range of 19% to 20% within three to four years, a substantial increase from its current level of 13% to 14%. AAR, which has a market capitalization of about $4.7 billion, has seen its shares rise approximately 30% over the past year amid strong demand for its services.