Onex To Buy Stake In Aircraft Manager BBAM

December 4, 2012

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Canadian private equity company Onex said it would acquire a 50 percent stake in BBAM, a manager of commercial jet aircraft, for USD$165 million.

Onex will acquire a 35 percent stake from BBAM's management and a 15 percent stake from Fly Leasing, an aircraft leasing company that is serviced by BBAM.

The Canadian company said last week that it would buy US-based insurance brokerage USI from Goldman Sachs' private equity fund for USD$2.3 billion, to expand its financial services footprint.

Onex said it would buy USD$25 million worth of newly issued Fly shares at USD$11.41 per share - a 7 percent discount to Fly's Friday close - along with BBAM.

The deal and share issue will give Fly USD$75 million in pre-tax gross proceeds, Onex said in a statement. The deal is expected to close by the end of the year.

The senior executives of BBAM acquired the business from Babcock & Brown in April 2010 and owned 85 percent of the company before Monday's deal, according to its website.

California-based BBAM has over 450 commercial aircraft in its managed fleet. BBAM assists Fly in acquiring and disposing aircraft, markets aircraft for lease, monitors maintenance, insurance and other obligations under leases and enforces Fly Leasing's rights against lessees.

Fly has 110 aircraft on long-term operating leases to 53 airlines in 29 countries.