At the time of Cerberus’s investment in a leading global airline leasing company, the business had one of the sector’s strongest management teams, but had been hampered by limited access to capital.
Cerberus’s success in setting the company on a strong growth path illustrates the important role the Firm’s operational and equity investment plays in supporting strong business plans and enhancing the value of its portfolio companies.
Keeping the aviation company’s senior management in place, Cerberus moved quickly to facilitate acquisition of:
- A commercial aircraft engine leasing and parts trading company
- $6 billion in new Airbus aircraft, a move that was critical to update and expand the company’s aging fleet
These transactions made the company the world’s third largest aviation lessor and transformed the organization into a fully integrated aircraft leasing, trading and maintenance company able to draw value throughout the entire life of both aircraft and engines.
During Cerberus’s ownership, the aviation company was able to restructure its balance sheet and position itself for growth. The business significantly increased its net income and earnings before interest, taxes, depreciation and amortization (EBITDA) and expanded its global presence through joint ventures in the Middle East and China.
The organization also grew from 212 employees in 2004 to 343 at the time of its initial public offering (IPO) in 2006.
Following the company’s $600 million IPO on the New York Stock Exchange in November 2006, Cerberus retained a majority stake in the company and continued to advise its management. In 2007, the company raised an additional $518 million in a secondary share offering to support its continued growth plans, reducing Cerberus’s position to a minority shareholder. Cerberus exited the investment in 2013.
Cerberus’s nearly seven-year commitment has ushered in a period of growth and continued stability for the company.