AAR agrees to buy controlling stake in MRO Holdings for $4 billion

Overview

Updated 1 hour ago

AAR Corp., an Illinois-based aviation parts and repair company, agreed on Sept. 28 to buy a 65% stake in MRO Holdings, a private-equity-backed aircraft maintenance firm, in a deal that values MRO Holdings at $4 billion. The combination creates what AAR says will be the world's largest heavy-maintenance provider, servicing nearly 3,000 aircraft a year across its hangars.

The deal is AAR's seventh acquisition in four years, all part of its push to become an integrated parts, repair, and software platform. It lifts AAR's adjusted EBITDA margin from roughly 12% to 16% before synergies, with a target near 20% within three to four years. AAR expects the deal to close in its fiscal third quarter ending February 2027, pending regulatory approvals.

Why it matters

If the deal closes, AAR becomes the world's largest heavy-maintenance repairer, with the hangars and contracts to service nearly 3,000 commercial aircraft a year.

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Key Indicators

$4.0B

Implied enterprise value of MRO Holdings

Equals 10.7x MRO Holdings' forecast 2026 adjusted EBITDA, including $75 million in expected synergies.

16%

Pro forma adjusted EBITDA margin

Up from AAR's standalone ~12%; AAR targets 19-20% within three to four years.

3,000

Aircraft serviced annually post-deal

Up from about 1,200; maintenance service hours grow from 7 million to 19 million.

$285M

MRO Holdings forecast 2026 adjusted EBITDA

On ~$1.0 billion of revenue, a roughly 27% margin with about 70% cash conversion.

Voices

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People Involved

John M. Holmes

Chairman, President, and CEO of AAR

Leading the acquisition and the broader reshaping of AAR

Roberto Kriete

MRO Holdings co-owner

Retaining 35% ownership alongside Caoba Capital and Bain Capital

Organizations Involved

AAR CORP.

Publicly traded aviation services company (NYSE: AIR)

Acquirer — buying 65% of MRO Holdings

An Illinois-based aviation aftermarket company providing parts distribution, component repair, and maintenance software.

MRO Holdings

Private aircraft maintenance, repair, and overhaul (MRO) provider

Acquisition target — 65% sold to AAR, 35% retained by owners

A heavy-maintenance specialist whose customers are about 90% U.S. airlines.

Bain Capital

Private equity firm

MRO Holdings co-owner, retaining 35% after the deal

A global private equity firm that co-owns MRO Holdings.

Timeline

2 events Latest: Today

September 2026
AAR agrees to acquire 65% of MRO Holdings
Today Acquisition

AAR announces a deal valuing MRO Holdings at $4.0 billion enterprise value, or 10.7x its forecast 2026 adjusted EBITDA. AAR will pay about $1.8 billion in equity value and take on the target's ~$1.3 billion debt.
Today
AAR reports first-quarter fiscal 2027 results
Today Earnings

Sales rose 24% to $918 million; adjusted diluted EPS rose 38% to $1.49; adjusted EBITDA margin widened to 12.7% from 11.7%.
Today

Scenarios

AAR completes MRO Holdings acquisition on schedule

Likely Resolves by Feb 28, 2027

Discussed by: AAR management and Aviation Week

The deal closes in AAR's fiscal third quarter ending February 2027, after regulatory approvals and customary conditions. AAR's board has approved it, and the ~$2.1 billion debt portion is backed by a fully committed bridge facility. AAR would consolidate MRO Holdings' results immediately.

Regulatory review delays the closing

Possible Resolves by Aug 31, 2027

Discussed by: Market analysts; TipRanks reported investor nervousness over deal terms

The transaction requires regulatory approvals that could stretch past AAR's fiscal Q3 2027. TipRanks noted investors are uneasy about the hefty price tag and near-term integration risk, which could also complicate the regulatory path. Closing would slip into AAR's fiscal 2028.

AAR begins buying out the remaining 35% stake

Likely Resolves by End of 2030

Discussed by: John Holmes, AAR CEO, in Aviation Week

AAR holds options to purchase the remaining 35% of MRO Holdings: 30% in three equal tranches on the second, third, and fourth anniversaries of closing, plus 5% exercisable within six years. Holmes told Aviation Week AAR 'fully intends' to exercise them. Strong deal-related cash flow would make the buyout straightforward.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

October 2018

Boeing acquires KLX Aerospace (2018)

Boeing agreed to buy parts distributor KLX Aerospace in a deal worth about $4 billion, adding a large aftermarket parts supply network to its services business.

Then

Boeing folded KLX into its Global Services division, gaining scale in parts distribution across commercial fleets.

Now

It showed an aircraft manufacturer expanding aftermarket parts and repair revenue through acquisition rather than organic growth.

Why this matters now

Boeing-KLX follows the same logic AAR is using: a strategic buyer acquiring aftermarket scale instead of building it internally.

March 2021

AerCap acquires GE's GECAS (2021)

GE agreed in March 2021 to sell its GECAS aircraft leasing arm to rival AerCap in a deal valued around $30 billion. The combined company became the world's largest aircraft lessor, owning or managing roughly 2,000 aircraft.

Then

AerCap immediately gained dominant scale in leasing. GE shed a capital-heavy business to focus on jet engines and other core operations.

Now

The deal became a benchmark for how scale concentrates in aviation services, leaving one dominant player in leasing.

Why this matters now

Like AerCap-GECAS, the AAR-MRO Holdings deal uses a large acquisition to create a category-leading scale player in an aviation services niche.