LONDON – Tokyo-based SMBC Aviation Capital, NWS Holdings Limited, Chow Tai Fook Enterprises, and Chow Tai Fook Enterprises Limited will acquire Goshawk Aviation, an Irish global aircraft leasing company.
This deal is expected to have an enterprise value of $6.7 billion.
The transaction is financed through a series of debt and equity, where debt financing for the transaction will be funded by shareholders, along with bank and capital markets.
Where Equity for the equity will be provided by SMBC’s Aviation Capital’s shareholders, Sumimoto Mitsui Financial Group, and Sumimoto Cooperation.
While the deal is announced, it is to be expected to finalize in the second half of 2022 and will be incorporated in Ireland with its headquarters in Dublin.
The historic deal means that SMBC Aviation Capital will be the second-largest aircraft lessor in the world in terms of aircraft inventory, and will definitely create the company being the most extensive Japanese aircraft lessor.
MBC Aviation Capital’s, Chief Executive Officer Peter Barrett stated: “This is the right transaction for SMBC Aviation Capital, allowing us to better serve our customers in a fast-evolving sector whilst also accelerating our growth and delivering significant value for our shareholders.”
“Goshawk is a high-quality business with assets and people that complement our own.”
“The combined business will continue to have a disciplined focus on young, liquid, most in-demand narrowbody aircraft with one of the most environmentally friendly portfolios of any major leasing company together with 261 new generations, fuel-efficient aircraft on order.”
“We are undertaking this transaction at a strategic point in the cycle with a strong recovery building across the global airline industry and we expect the transaction to be accretive to SMBC Aviation Capital’s return on capital.”
The transaction is significant, as the Japanese aircraft lessor is expected to take in a portfolio of 176 owned and managed aircraft (assets) as part of the landmark acquisition.
This brings up the total business portfolio of 909 owned and managed aircraft. Additionally, there are more orders from Boeing and Airbus comprising 261 new narrowbody aircraft valued at $13 billion.
The acquisition of SMBC Aviation Capital of Goshwak will raise the combined total business assets to $37 billion, and also include additional orders of $13 billion such as A320NEO and Boeing 737MAX aircraft. #
This impressive deal has the strong support of the shareholders of the SMBC group and will also propel the leasing company’s strategic focus on young narrow-body aircraft.
This new portfolio will be suitable for the shape of the aviation industry.
The recovery has been inconsistent between continents, where Asia is seeing a ‘K’ shaped recovery, whereas Australia, North America, and Europe are witnessing a ‘U’ shaped.
82% of SMBC’s portfolio comprises narrowbody aircraft, which is suitable for the recovery shape of the industry.
SMBC’s move is purely strategic and bringing a more narrow-body aircraft into the company’s portfolio will diversify its risk and is suitable for the current aviation market.