Vector Aerospace Sees Interest from PE firms, Rivals

Canada’s Vector Aerospace Group has attracted interest from potential buyers including Triumph Group, L-3 Communications Holdings and private equity firm First Reserve, Reuters reported. Analysts have estimated Vector’s value at between $490 million and $550 million in a sale, Reuters said.

(Reuters) Canada’s Vector Aerospace Group (RNO.TO) has attracted potential takeover interest from U.S. rivals including Triumph Group (TGI.N) and L-3 Communications Holdings (LLL.N), people familiar with the matter said.

Toronto-based aviation repair and overhaul services company Vector Aerospace, which has hired Scotia Capital to advise on strategic options, plans to begin management meetings with the interested parties this week, two sources told Reuters.

Several private equity firms, including energy industry-focused First Reserve, are also looking at Vector, the sources and a third source familiar with the matter said.

The sources asked not to be identified because details of the auction are not public. Representatives for Vector Aerospace, Triumph and L-3 could not be immediately reached for comment.

Canada’s IMP Group, which already owns roughly a 32 percent stake in Vector, could also join the process to bid for the rest of the company, one of the sources said.

Vector said on Dec. 3 that its board of directors has commenced a review of strategic alternatives including a potential sale of the company. Analysts have estimated Vector could fetch between $490 million and $550 million in a sale.

With facilities in Canada, the United States, Britain and Africa, Vector provides maintenance, repair and overhaul (MRO) services for commercial and military aircraft and helicopter operators.

Vector was created in 1998 from a public flotation of the in-house MRO services of CHC Helicopter Corporation.

First Reserve could be interested because it owns CHC, the largest global commercial helicopter operator that provides helicopter transportation services primarily to the offshore oil and gas industry.

Headquartered in Wayne, Pennsylvania, Triumph builds and repairs aircraft components, accesorries and systems, while New York-based L-3 provides MRO services for air, sea and land vehicles.

Vector is among several aerospace assets up for sale as the market for commercial aerospace parts and maintenance starts to pick up after a deep slump over the past few years.

Among others, state-owned Dubai Aerospace Enterprise (DAE) has been trying to sell another aviation maintenance company StandardAero — which it bought from private equity firm the Carlyle Group [CYL.UL] for $1.9 billion in 2007 — people familiar with the matter said on Friday. [ID:nN10284339]

Private equity firm Clayton, Dubilier & Rice appears to be only party remaining in the process, one of the sources said.

The auction process has moved slowly, partly because Dubai sought ways to retain a stake in StandardAero to take advantage of an anticipated pickup in the commercial aerospace market over the next couple of years, sources told Reuters previously.

A wide price gap has also bogged down the process, especially since Dubai bought StandardAero at the top of the market just before the commercial aerospace industry fell into a deep slump amid the global recession, several sources said.

(Reporting by Soyoung Kim, editing by Dave Zimmerman)