Expansion of the Group's US Maintenance Operations

RNS Number : 7821L

Gama Aviation PLC

15 January 2021

 

Date: 15^th January 2021

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (EU) No 596/2014

Gama Aviation Plc (AIM:GMAA) ("Gama Aviation", the "Group")

 Strategically Significant Expansion of the Group's US Maintenance Operations

Gama Aviation Plc, the global business aviation service provider, today announces the strategic acquisition of Jet East Aviation Corporation, LLC ("Jet East") from East Coast Aviation, LLC which will significantly expand its existing US aircraft maintenance operations. 

Jet East is a full-service business aviation aircraft maintenance provider with approximately 200 employees.  It supplies a range of maintenance services at high traffic business aviation gateway airports that include, amongst others, the cities of New York, Boston, Philadelphia, Cleveland and Cincinnati. Jet East's maintenance network is highly complementary to the Group's existing US operations with little service or geographic overlap.

The acquisition of Jet East has been transacted by the Group's wholly owned US subsidiary Gama Aviation Engineering Inc ("GAEI") for $7.7m in cash, with a further $1m in deferred cash payable over two years and the assumption of $3.2m of Jet East debt.  The transaction has been entirely funded from the Group's existing resources. 

In 2020, Jet East's performance was negatively impacted by COVID-19.  In 2019, it reported revenues of $29.5m and an underlying EBIT of $1.2m inclusive of a depreciation charge of $0.3m. The net assets of Jet East as at 31^st December 2019 were $6.7m. 

The acquisition will substantially enhance the Group's already extensive maintenance capability within the US, capturing further market share in the world's most valuable business aviation market with circa 15,000 active business aviation aircraft. The enlarged business will provide unparalleled coast-to-coast coverage and capability that will enhance its service offering to the market and significantly strengthen its trading relationships with key customers.

The addition of three highly experienced executives will strengthen the Group's US business operations.  A tailored long-term executive incentive plan, which includes potential awards of GAEI stock linked to value accretion, will ensure alignment of managements' interests with that of the Group's shareholders.

The increased scale and competencies of the enlarged US maintenance business and the anticipated revenue synergies and operational efficiencies are expected to be enhancing to Group earnings following the first full year of acquisition.

Commenting on the transaction, Marwan Khalek, Chief Executive of Gama Aviation said:

"This strategically important acquisition enlarges and strengthens our presence in the US, the world's largest business aviation market. We are taking two entirely complementary businesses and combining them to provide a highly capable, coast-to-coast maintenance operation that supports our customers evident need to rationalise their supply base. The combination will provide our customers the advantages of operational efficiencies that only a single-source strategic supplier relationship can deliver. The combined business will also be well positioned to benefit from the inevitable recovery in US business aviation activity once the pandemic impact subsides.

This is a deal that enhances our service offering to our clients, is anticipated to be value accretive to our shareholders and will provide opportunity for our people."

ENDS

For further information please visit www.gamaaviation.com or contact:

Gama Aviation Plc  [phone]

Marwan Khalek, Chief Executive Officer

Daniel Ruback, Chief Financial Officer

Camarco   [phone]

Ginny Pulbrook

Geoffrey Pelham-Lane

Gama Aviation - notes to editors

Founded in 1983 on the simple purpose of providing aviation services that equip its customers with decisive advantage , Gama Aviation Plc (LSE AIM: GMAA) is a highly valued global partner to blue chip corporations, government agencies, healthcare trusts and private individuals.

The Group has three global divisions: Business Aviation (Aircraft Management, Charter, FBO & Maintenance), Special Mission (Air Ambulance & Rescue, National Security & Policing, Infrastructure & Survey, Energy & Offshore); and Technology & Outsourcing (Flight Operations, FBO, CAM software, Flight Planning, CAM & ARC services)

More details can be found at:  https://www.gamaaviation.com

 

END

 

 

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