But MRO provider will keep close eye on economy before making final decision
Independent maintenance, repair and overhaul (MRO) provider SR Technics expects to be ready for an initial public offering (IPO) by next October.
Whether the company proceeds with an IPO at that time will depend on its activities – including possible acquisitions or joint ventures – in the interim, as well as the state of the aviation cycle, says chairman Frank Turner. The company could decide to delay a share offering if the aviation cycle looks to have more upward sentiment at that time, Turner says.
The company is planning to expand its activities worldwide, through partnerships and acquisitions. “We want to expand in areas that are growing,” says Turner, citing the Asia-Pacific region as an important example. Turner says he hopes to target “new paradigm carriers” – airlines that have successfully adapted their business models to changes in the market – as potential customers. “We need to have a presence – whether sole or with someone else...we want to go where we see the new paradigm carriers becoming part of the infrastructure.”
The company is not planning another acquisition as complex as that of FLS Aerospace, Turner says. “We are looking at more than one bolt-on acquisition...we wouldn’t acquire a company that would impair our ability to go to an IPO.”
In September the company agreed a $325 million loan facility with GE Commercial Aviation Services, secured against its Airbus and Boeing components inventory, to allow it to expand its operations, as well as to pay off some debt.
“Components are going to be our real growth area,” Turner says, adding that SR Technics would consider a joint venture with one or more carriers on A380 components. Any operation would need to service a minimum of 25 aircraft, Turner says, and a likely target region would be Asia.
Following the successful initial integration of FLS earlier this year, SR Technics has now moved into the second phase of the process. Turner says SR Technics has committed to $80 million savings through synergies and restructuring in 2006, although he expects to achieve $90 million as part of this phase.
SR Technics is now focusing on creating two client-facing divisions – Integrated Component Solutions and Integrated Airline Solutions – both of which are expected to be fully operational by January, “to complete the journey from traditional MRO to integrated provider”.
HELEN MASSY-BERESFORD
Source: Flight International
