StandardAero Files for IPO

(Reuters) – StandardAero, an aircraft maintenance services provider backed by private equity firm Carlyle Group and Singapore’s sovereign wealth fund GIC, filed for an initial public offering in the United States on Friday.

The aftermarket services industry is heating up with several aircraft equipment manufacturers also expanding into this space in recent years, as the business can fetch strong margins with lighter capital investments.

Additionally, with aircraft engines having a lifespan of about three to four decades, aftermarket services such as inspections, maintenance, repairs, and overhauls can provide a long-term revenue stream for the providers.

While some large commercial airlines maintain in-house aftermarket services divisions, smaller players often outsource these operations to third parties.

StandardAero’s IPO arrives as the aviation sector recovers from a slump caused by the COVID-19 pandemic. Expectations of an imminent interest rate cut in the United States have also encouraged some companies to list their shares.

Founded in 1911 and based in Scottsdale, Arizona, StandardAero provides aftermarket services to commercial and military aviation, as well as energy clients. The company has partnered with major aircraft engine manufacturers including Rolls-Royce, GE Aerospace, and Pratt & Whitney.

Reuters reported in April that Carlyle was weighing options for StandardAero, including a possible sale that could value it at about $10 billion. The private equity firm acquired StandardAero from buyout firm Veritas Capital for about $5 billion in 2019.

StandardAero’s revenue surged 12% to $2.58 billion in the six months ended June 30 compared to the previous year. Its net income was $8.6 million for the same period, a significant improvement from a $12.6 million loss in the first half of 2023.

J.P. Morgan and Morgan Stanley are among the underwriters for the IPO, which aims to list on the New York Stock Exchange under the symbol “SARO.”