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Sector

Transport

Location

Switzerland

Entry date

December 2002

Exit date

November 2006

Fund

STAR I

Status

Realised


Overview

STAR acquired SR Technics in a consortium of financial investors including 3i as part of a management buyout of the company from SwissAir in December 2002. This transaction was the largest management buyout in the transport and logistics sector in 2002.

SR Technics is a leading airline service company, providing comprehensive technical support for aircraft, engines and components. At the time of the acquisition, c.50% of SR Technics’ revenue was generated from SwissAir.

STAR and 3i took advantage of an opportunity to combine the company's industry-leading expertise and outstanding reputation with capital from the investor consortium to create a multi-airline service company. This offering enabled airlines around the globe to realise cash from investments in non-core capital assets, generate major cost savings, and increase the flexibility of their cost structure. In addition, the consortium supported SR Technics in the acquisition of FLS Aerospace, substantially diversifying its product portfolio and enhancing its component services business. Several new contracts, such as the landmark 10 year $1 Billion Easy Jet outsourcing contract, successfully reduced the customer concentration away from SwissAir to c. 12% of revenue at the time of exit.

The initial transaction was completed as an MBO with traditional leveraged finance and mezzanine facilities. At the end of 2005, these facilities were replaced with longer-term, asset-backed financing that provided a flexible lending facility secured on the company’s spare parts pool.

In November 2006, STAR and 3i sold SR Technics to a consortium of three investors from the United Arab Emirates.

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