Acorn Growth Companies, a private equity (PE) investor focused on aerospace and defense, announced Oct. 11 that it has made a significant enough investment in aviation disassembly company EirTrade Aviation that the latter will be a “platform company” for the PE firm.
Financial details were not provided, but a platform company is defined as a strategic, initial investment by a PE firm that intends to continue to bolt on other acquisitions and grow the portfolio. Oklahoma-based Acorn said EirTrade’s founder, Ken Fitzgibbon, will remain CEO and retain “significant equity ownership” in the 13-year-old Irish company.
“Having known EirTrade for years through the industry and its interactions with our other portfolio companies, we have seen firsthand how critical the company is to its asset-owner partners and customers,” Acorn Managing Partner Rick Nagel said. Acorn’s investment will back market share growth, as EirTrade will boost its consignment business with increased financial capacity to purchase aviation assets.
“We’ve had an amazing growth trajectory absent access to significant capital resources,” Fitzgibbon said in the announcement. “Now with Acorn’s assistance, we can scale the business collaboratively with our existing partners, as well as on our own balance sheet, evaluating significantly larger asset opportunities.”
The used serviceable material market is “on fire” when it comes to selling material, EirTrade Vice President for Asset Management Lee Carey told Aviation Week recently.
But acquisition of aircraft and engines for disassembly is becoming more difficult due to delays in the delivery of new aircraft.
It recently opened an engine disassembly facility in Dublin to help minimize engine teardown time and leverage control across its supply chain. Earlier this year, EirTrade expanded in North America when it opened its first stock hub and warehouse in Dallas. A related team of employees is in Atlanta.
According to data cited by EirTrade, the global aircraft engine maintenance, repair and overhaul (MRO) market size is projected to reach $66.97 billion by 2028 from $37.34 billion in 2021, expanding at a compound annual growth rate of 8.6% in 2022-2028. North America is the largest market, with a share of more than 35%, followed by Europe and the Asia Pacific together at around 40%. The major growth drivers for this market are technological advancements for lower emissions and less maintenance, use of advanced materials, and demand for more fuel-efficient engines.
The combination of surging commercial passenger numbers, deferred maintenance and slower-than-expected aircraft manufacturing is fueling significantly more merger and acquisition activity in the MRO sector. Experts see this trend running for several years, with the drivers for deal-making expanding beyond just pandemic reactions.
