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Dubai Aerospace to double its fleet with AWAS acquisition

Dubai Aerospace Enterprise Ltd (DAE) is acquiring Dublin-based AWAS, the world's 10th biggest aircraft lessor, in a deal that will add over 200 planes to its fleet and more than double the size of its current business.
Operating for more than 30 years, AWAS is one of the world's leading aircraft leasing companies, with a fleet of 263 owned, managed and committed narrow and wide-body aircraft, including a pipeline of 23 new aircraft on order to be delivered before the end of 2018. AWAS currently provides customised aviation solutions to over 85 airline customers in over 45 countries.
The combined company will have an owned, managed and committed aircraft fleet of 394 aircraft with a total value of over $14 billion. It will serve over 110 airline customers in over 55 countries from offices in Dubai, Ireland, Singapore and the United States. "This acquisition of AWAS is strategically compelling and propels DAE into a top 10 aircraft leasing platform. Our leasing business has been growing at a rapid clip and this acquisition will more than double the current size of our business, providing the necessary scale for DAE to best serve its customers," Khalifa H. AlDaboos, managing director of DAE, said. AWAS is the latest asset to be sold in the rapidly consolidating global aircraft leasing industry whose top 50 lessors had a fleet value of $256 billion last year, according to consultancy Flightglobal. The sector is seeing increased investment from players in emerging markets such as China, which were also in the running for AWAS, sources said.
Reuters had reported in December citing sources that AWAS had been put up for sale in an auction that could value the lessor at $7 billion, including debt.
DAE, controlled by the government of Dubai, signed a definitive agreement to buy AWAS from British financier Guy Hands' private equity firm Terra Firma Capital Partners and Canadian Pension Plan Investment Board (CPPIB), the companies said on Monday. They did not disclose financial terms of the deal.
"The transaction will be financed by DAE's internal resources and committed debt financing. The transaction is subject to required regulatory approvals and is expected to be completed in the third quarter of 2017," according to the DAE statement. DAE is the largest aircraft lessor in the Middle East with a portfolio of 112 planes. Paid for in US dollars, aircraft are comparatively easy to re-lease to various airline operators across the world.
"Over three decades AWAS has built a respected brand, a highly experienced workforce, and a world-class platform with all key capabilities in-house. We are delighted to be able to acquire this platform, and to combine it with our capabilities to offer our global customers an even wider range of aviation solutions. In addition, this combination results in a well-diversified portfolio with the ability to generate strong risk-adjusted returns," Firoz Tarapore. chief executive officer of DAE, said.
DAE was advised by Freshfields Bruckhaus Deringer LLP and Morgan Stanley & Co. LLC. DAE was also advised by KPMG and Latham and Watkins LLP. Goldman Sachs is acting as financial adviser and Milbank as legal adviser to the seller.  
- With inputs from Reuters