Gama Aviation Plc has conditionally agreed to sell its Solon-based Jet East MRO business to West Star Aviation Enterprises for $131 million on a cash free/debt free basis with normalized working capital.
“After interest from several parties, we are delighted to have agreed the sale of Jet East to West Star Aviation,” Marwan Khalek, Group Chief Executive, Gama Aviation said in a statement. “I believe the new owner will be an excellent guardian of our valued strategic relationships and, importantly, the people that deliver critical services to our customers every day.
“The board and I have long since believed that the Group has significant underlying value and the resultant proceeds from this transaction clearly affirm this perspective. Collectively we will now consider how the net proceeds of the transaction will be deployed to further the strategic ambitions of the Group, support the continued hard work of our talented teams as well as rewarding the loyalty and support of our Shareholders from this significant value realisation event.
The Group first provided aircraft maintenance services in the United States in 2012. In January 2021 – following the 2020 disposal of its US aircraft management business to WheelsUp – the company announced the acquisition of Jet East (a US full-service business aviation aircraft maintenance provider).
The aggregate consideration payable was up to $11.9 million, including the assumption of debt. The transaction structure also involved the management team of Jet East participating in a shadow equity scheme.
The activities of Jet East were combined with the existing maintenance activities of the Group in the US, with the resulting entity operating as Jet East. In 2020, the existing US MRO business generated $38.6 million of revenue and in the same period the Jet East business generated $28.2 million of revenue.
Jet East has subsequently performed strongly, benefitting from a highly committed management team, a complementary nationwide network of operations, strong customer relationships and cost savings from rationalisation of operations. There has also been considerable investment totalling some US$25 million to enable growth including setting up new facilities in Millville, Las Vegas and Statesville.
Jet East reported revenues of $79.2 million in 2021 and adjusted loss of $8 million. In 2022, Jet East reported revenues of $118.2 million and adjusted EBIT of $1.3 million. In the first half of 2023, Jet East reported revenues of $70.7 million and adjusted EBIT of $900,000.
