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Carlyle Aviation Partners to Acquire Fly Leasing in $2.36B Deal

March 30, 2021, 07:19 AM
Filed Under: Mergers & Acquisitions

Fly Leasing Limited, a global leader in aircraft leasing, announced it has entered into a definitive agreement to be acquired by an affiliate of Carlyle Aviation Partners, the commercial aviation investment and servicing arm within The Carlyle Group’s $56 billion Global Credit platform. Under the terms of the merger agreement, FLY shareholders will receive $17.05 per share in cash, representing a total equity valuation of approximately $520 million. The total enterprise value of the transaction is approximately $2.36 billion. FLY’s portfolio of 84 aircraft and seven engines is on lease to 37 airlines in 22 countries.

William Hoffman, Chairman of Carlyle Aviation Partners, said, “This transaction, our largest fleet acquisition to date, will add 84 predominantly mid-life aircraft on lease to a diversified group of airlines to our managed portfolio. These aircraft fit strategically within our business and will give us an opportunity to create meaningful value for our investors.”

“This transaction represents strong value for FLY shareholders at a time when airlines are facing an extremely difficult environment and smaller aircraft lessors are disadvantaged in the debt markets,” said Colm Barrington, CEO of FLY. “After a thorough review and evaluation of its options, FLY’s Board of Directors enthusiastically recommends this transaction to its shareholders.”

The per share cash consideration represents a premium of approximately 29 percent to FLY’s closing price on March 26 and a 43 percent premium to the volume-weighted average share price during the last 30 trading days.

The Board of Directors of FLY has approved the merger agreement, acting upon the recommendation of a special committee appointed by the Board of Directors and consisting solely of independent and disinterested directors, and has recommended that FLY shareholders vote in favor of the transaction.

Carlyle Aviation Partners will use funds from its fifth aviation fund, SASOF V, for this acquisition. Carlyle Aviation Partners is the commercial aviation investment and servicing arm of The Carlyle Group’s $56 billion Global Credit platform. It has total assets under management of $6.1 billion, with a team of more than 90 employees and offices in the U.S., Ireland and Singapore. Carlyle Aviation Partners has 246 aircraft owned, managed or committed to purchase with 93 airline lessees in 53 countries.

The transaction is expected to close in the third quarter of 2021 and is subject to customary closing conditions, including applicable regulatory clearance and the approval of FLY’s shareholders.  Given the pending transaction, FLY will not host a first quarter earnings call.

Goldman Sachs & Co. LLC is acting as financial advisor to FLY and Gibson, Dunn & Crutcher LLP, Clifford Chance US LLP, Conyers Dill & Pearman, and McCann FitzGerald are acting as FLY’s legal counsel.

Kirkland & Ellis LLP is acting as legal counsel to BBAM LP, FLY’s manager and servicer.

RBC Capital Markets is acting as financial advisor and providing financing to Carlyle Aviation on the transaction. Milbank LLP and Wakefield Quin Limited are acting as legal counsel to Carlyle Aviation Partners.

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