Gama Aviation To Sell Jet East To Sterling For $131 Mln; Stock Climbs
Shares of Gama Aviation Plc (GMAA.L) were surging around 56 percent in the morning trading in London after the company announced its agreement to sell US MRO Business, Gama Aviation (Eng) Inc. or GAEI, trading as Jet East.
West Star Aviation Enterprises, LLC, owned by US private equity group Sterling Group, will buy Jet East for an enterprise value of around $131 million on a cash free/debt free basis with normalised working capital.
The company expects the net proceeds from the sale of Jet East to be around $100 million.
The sale is contingent on shareholder approval at a General Meeting which is to take place on November 3 and the transaction is expected to be completed shortly thereafter.
Following completion, the Directors expect to return a substantial proportion of the net proceeds to shareholders which is expected to be not less than 55 pence per share.
Sterling Group in the fourth quarter of 2022 had approached Gama about the possibility of acquiring Jet East in order to combine it with West Star Aviation.
The latest deal follows a period of negotiation and due diligence on Jet East.
Marwan Khalek, Group Chief Executive, said, “This deal provides Gama Aviation the appropriate capital to allow us to capture the tremendous opportunities we have in our Special Mission, Technology & Outsourcing and Business Aviation strategic business units.”
In 2022, Jet East reported revenues of $118.2 million and adjusted EBIT of $1.3 million. In the latest first half, Jet East reported revenues of $70.7 million and adjusted EBIT of $0.9 million.
It was in January 2021 that Gama Aviation acquired Jet East, a US full-service business aviation aircraft maintenance provider, for a payment of up to $11.9 million, including the assumption of debt.
In 2020, the company had disposed its US aircraft management business to WheelsUp.
In London, Gama Aviation shares were trading at 82 pence, up 56.19 percent.
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