Graphite Capital has provided undisclosed financing to Aero Technics to support its acquisition of Airbase Interiors. Based in the UK, Airbase Interiors focuses on the repair and dry cleaning of airplane seats.
Graphite Capital, a leading mid-market private equity specialist, has provided development capital to Aero Technics, a civil aircraft maintenance business focusing on cabin services, to acquire Airbase Interiors, which specialises in the repair and dry cleaning of aircraft seats.
Aero Technics was founded in 2002 by its present chief executive, Steve Cloran. He has long experience in the aircraft services industry and will continue to lead the combined business, which will have operations in Manchester, Dubai, Heathrow and Gatwick with a customer base that spans many leading airlines.
The UK civil aircraft maintenance market is estimated to be worth £1.7 billion annually. Growth is underpinned by the continued expansion of the global aircraft fleet and the rise of low-cost carriers, which is increasing demand for outsourced maintenance services. The industry is fragmented and tightly regulated, with new approvals difficult to obtain. Airlines are keen to rationalise their buying around larger suppliers to simplify the management of their supply chains and to save costs.
The acquisition of Airbase is the first step towards building a group of businesses focused on aircraft servicing with significant growth opportunities in both the UK and internationally. Aero Technics will continue to focus initially on cabin maintenance services, and in particular seats. Potential further acquisitions have already been identified which would allow the company to broaden the range of its services and geographic scope, and gain significant synergies.
Steve Cloran, Aero Technics chief executive, said: ‘There is an exciting opportunity here to build a broad-based business capable of supporting the airlines in a variety of service categories and in multiple locations. It is clear from our discussions with Graphite that they share our vision. We look forward to working with them to make it a reality.’
Mike Innes, Graphite senior partner, commented: ‘The civil aircraft maintenance sector has strong growth potential and significant consolidation opportunities. We are delighted to be backing a management team with a proven track record in the sector and a clear strategy to build a group of significant scale.’
Mike Innes, Simon May and Alexandra Mills managed the transaction for Graphite.
Corporate Finance: Catalyst (Paul Vanstone, Tom Cowap and Mark Farlow)
Legal: Management – Goodwin Procter (Richard Lever, Michael Miranda)
Graphite – DLA (Rob Salter, David Raff, James Kerrigan, Ciaran Stone and John Pryor)
Financial Diligence: RSM (Nick Williams and Peter Vandervelde)
Commercial Diligence: Armstrong Transaction Services (Piers Copham)
Insurance Diligence: Arthur J. Gallagher (George Minoprio)
About Graphite Capital
Graphite is a specialist provider of private equity finance to mid-market companies in the UK. Graphite focuses on management buy-outs and also invests in replacement capital, expansion finance and turnaround opportunities. It backs companies with enterprise values of £25 million to £200 million. Graphite manages £1.4 billion through three private funds and the publicly-quoted Graphite Enterprise Trust PLC.
In September 2013 Graphite Capital raised £500 million for its eighth fund, Graphite Capital Partners VIII. The Aero Technics transaction marks the fourth investment by that fund. The others are nGage, a fast-growing recruitment business serving a range of niche areas within the public and private sectors, ICR, an energy industry repair and maintenance group, and City & County Healthcare Group, the UK’s third largest home care provider.
Graphite’s previous fund invested in businesses in a variety of industry sectors including Corbin & King, operator of The Wolseley, The Delaunay, Brasserie Zédel, Colbert and Fischer’s restaurants and The Beaumont hotel, and Explore Learning, a fast-growing provider of tuition to children aged 5 to 14. Successful disposals from that fund include Kurt Geiger (luxury shoe retailer), Alexander Mann Solutions (recruitment process outsourcing), Education Personnel (provision of supply teachers) and London Square (house-builder focused on prime sites within the M25).
Graphite has successfully backed a number of ‘buy and build’ investments, most notably London Square and Avery Healthcare group, a care home operator.
See the website: www.graphitecapital.com