AAR To Acquire A 65% Interest In MRO Holdings For An Equity Value Of ~$1.8B; To Fund Deal With $2.10B Debt, $780M Equity At $135/Share, $230M PIPE; Co. Has Option To Buy Remaining 35% Of MRO Holdings In Tranches Over Six Years

AAR CORP. (NYSE:AIR) (the "Company" or "AAR"), a leading Parts, Repair, and Software platform in the aviation aftermarket, today announced it has entered into a definitive agreement to acquire a 65% controlling interest in MRO Holdings at an implied enterprise value of $4.0 billion. This represents 10.7x MRO Holdings' forecasted full calendar year 2026 adjusted EBITDA, including $75 million in anticipated run-rate cost synergies and net of transaction-related tax benefits with an expected present value of approximately $150 million. The transaction will expand and strengthen AAR's leading aviation aftermarket platform and create significant additional growth opportunities across the Company's core Parts, Repair, and Software activities. The combination creates advantages for AAR's customers as the Company will offer a broader range of maintenance solutions.

Under the terms of the agreement, AAR will initially acquire a 65% interest in MRO Holdings for an equity value of approximately $1.8 billion. As part of this initial transaction, AAR will also repay approximately $1.3 billion of MRO Holdings' existing borrowings. AAR expects to fund the transaction, including related expenses, through approximately $2.1 billion of new debt, approximately $780 million of equity issued at $135 per share to existing MRO Holdings shareholders, and approximately $230 million of proceeds from a private investment in public equity (PIPE) offering, led by The Pritzker Organization and other blue-chip institutional investors.

AAR will have the option to acquire the remaining 35% ownership interest of MRO Holdings with 5% exercisable at any time within six years of the closing of the initial Acquisition, and the remaining 30% exercisable in three equal tranches of 10% on the second, third, and fourth anniversaries of the closing of the initial acquisition. AAR will control the MRO Holdings Board of Managers, and the selling owners will be subject to customary lockups and voting-support provisions with respect to the AAR shares they receive in the transaction.