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Orix clinches stake in Avolon
Posted on Wednesday, 08 August 2018 14:34
Orix via Orix Aviation Systems, has announced it is acquiring a 30.0 per cent stake worth USD 2.20 billion in aircraft leasing company Avolon Holdings from HNA Group.

The transaction, which implies an enterprise value for the entire business of USD 23.70 billion, as of 31st March 2018, is expected to complete in November, following necessary approvals and the obtaining of licenses.

A deal will expand Orix’s presence within the global aircraft leasing sector during a period of growth in the industry and an increase in global passenger traffic.

The latter, according to the Boeing commercial market outlook for 2018, averaged 6.5 per cent over the last five years, signalling a rapid increase due to tourism and lower air fares.

Orix aims to achieve sustainable long-term growth of its business by way of strengthening its access to the manufacturer order positions that Avolon holds and also further expanding its aircraft leasing business investment universe.

Across a 12-month period, ending on 31st March 2018, the buyer generated revenue of USD 25.60 billion and net income of USD 2.8 billion.

A purchase will also allow Avolon to raise its profile on the financial Japanese markets, while, according to Reuters, Orix Aviation will partly own a much larger aircraft lessor that is almost three times its own size.

Orix Aviation has a team of 85 professionals that oversees USD 10.00 billion worth of aircraft assets under management.

Headquartered in Dublin, and including operations in Hong Kong, it has bought, sold or leased more than 100 vehicles in the excess of USD 4.00 billion over a period of 12 months ending 31st December 2018.

Orix, as a result, gains access to Avolon’s portfolio with a fleet of 890 aircraft that operates worldwide.

Formed in 2010, the target is ultimately controlled by HNA Group, the Chinese conglomerate that has been shedding assets this year in order to get a handle on its debt pile.

According to Zephyr, the M&A database published by Bureau van Dijk, there have been 59 deals targeting commercial air, rail and water transportation equipment rental and leasing providers announced worldwide since the beginning of 2018.

Red Aircraft Holdings 2, in the largest of these deals, was bought by Incline Aladdin Holdings for USD 1.24 billion.

© Zephus Ltd