Wood Dale, Illinois, June 29, 2020 (GLOBE NEWSWIRE) -- AAR CORP. (NYSE:AIR), a leading provider of aviation services to commercial and government operators worldwide, announced that it has entered into a definitive agreement to divest its aerospace composite manufacturing business after running a sale process that began earlier this year. The buyer is an affiliate of Architect Equity. The Composites business designs, fabricates and assembles composite aerospace products for customers in the commercial aerospace and defense industries.
“This divestiture is consistent with our multi-year strategy to focus our portfolio on our core services offerings. It will reduce complexity and allow us to further prioritize our efforts on our market-leading aviation aftermarket operations,” said John M. Holmes, President and Chief Executive Officer of AAR CORP.
The divestiture of the Composites business, which was unprofitable in fiscal year 2020, along with AAR’s previously announced cost reduction actions, are expected to drive meaningful margin improvement once demand recovers from the impact of COVID-19. Our other cost reduction actions include:
- Closing the Duluth, Minnesota maintenance, repair and overhaul facility and transferring the equipment to other AAR operations
- Furloughing approximately 1,000 full-time employees
- Eliminating significant headcount through contractor and employee reductions
- Implementing executive and other employee pay reductions
- Consolidating the Goldsboro, North Carolina facility into the Cadillac, Michigan facility
- Exiting underperforming contracts and product lines
Architect is an experienced investor, and AAR believes it is the right partner to leverage Composites’ history of designing and manufacturing complex aerospace products, and to ensure the continued success of the business and its customers and employees going forward.
The Composites business employs approximately 150 people at facilities located in Clearwater, Florida and Sacramento, California. The transaction is expected to close in the third quarter of calendar year 2020, subject to the satisfaction of customary closing conditions. Terms of the transaction were not disclosed.
SunTrust Robinson Humphrey, Inc. is acting as financial advisor to AAR and Winston & Strawn LLP is acting as legal advisor to AAR.