Castle Harlan to Take Off With Airline Service Co. –

Castle Harlan wrapped up 1998 with two deals, the most recent of which was its agreement to acquire AMR Services, a provider of ground services to airlines, from AMR Corp., the parent company of American Airlines, for an undisclosed amount.

Also last year, Castle Harlan acquired Houston family restaurant chain Luther’s Bar-B-Q for an undisclosed amount.

Castle Harlan expects to close the AMR Services deal within a few weeks, said Marcel Fournier, a managing director at the firm. He said the company had revenue in 1998 of about $220 million. AMR Services operates in 63 airports around the world and provides services to more than 200 airlines. Mr. Fournier declined to discuss financing for the deal but said that a syndicated loan was being arranged, all in the form of senior debt.

Mr. Fournier said his firm will acquire other similar ground service providers in the future.

The acquisition is the third deal Castle Harlan has completed in the airline industry. Last year, the firm sold MAG Aerospace Industries, a maker of airplane sanitary systems, to Paris-based Zodiac S.A. (BUYOUTS Jan. 12, 1998, p. 11). The firm also owned Smarte Carte Inc., which rents luggage carts in airports (BUYOUTS Apr. 7, 1997, p. 12).

Finger Lickin’ Good Buyout

On Nov. 30 last year, Castle Harlan completed a management-led buyout of Luther’s Bar-B-Q. The restaurant chain is well-known in the Houston area and has annual sales of about $33 million, said Howard Morgan, a managing director at the firm.

Financing was arranged through Merrill Lynch & Co., but Mr. Morgan declined to give further details, adding that the arrangement provides “substantial liquidity” to Luther’s Bar-B-Q for add-ons.

Castle Harlan plans on using the company as a platform to acquire other barbecue restaurants. “There is a universe of small regional barbecue companies,” Mr. Morgan said. “We want to bring them under the same umbrella, but keep their regional character. They’re all a little different.”