The acquisition is valued at $120 million.
AAR acquired Trax, the aircraft MRO and fleet management software provider, for approximately $120 million.
Founded in 1999, the company provides mobile and cloud MRO solutions targeting maintenance efficiencies, cost reduction and information flow between airlines, lessors and MROs.
Among its core products are eMRO, a web-based enterprise MRO software, and eMobility, which provides a suite of mobile applications, including task cards, digital manuals, electronic logbooks, fleet status and warehouse management.
Headquartered in Miami, Trax employs about 110 people and supports more than 5,000 aircraft while providing software to more than 200 airlines, MROs and government aircraft operators in total.
AAR notes that the acquisition will enhance its strategy to offer digital solutions to its aftermarket customers. Additionally, the acquisition provides AAR with opportunities to cross-sell products and services through Trax’s complementary customer base.
John Holmes, chairman, president and CEO at AAR, believes that the acquisition will be beneficial for the company's customers, allowing them to "better access AAR's parts and services offerings as Trax is the materials management system used by thousands of buyers and planners at airlines around the world."
“We believe we can support Trax’s continued growth by investing in its platforms and by leveraging our global relationships to help Trax reach additional customers,” Holmes says.
Jose Almedia, Trax's CEO, adds that the partnership with AAR will further accelerate Trax’s growth and development. “By combining two leading independent aftermarket services providers, we create a compelling and unique offering to support the global aviation industry,” he says.
Additionally, AAR notes that the acquisition will add a high margin services offering that can generate significant recurring revenue, leveraging its strong intellectual property and software as a service (SaaS) business model.
The company also notes that the recent acquisition is expected to be accretive to both adjusted earnings per share and earnings before interest, taxes, depreciation, and amortization in the first full year.
Ken Hebert, an analyst at RBC Capital Markets, views the acquisition as a positive and notes, "We believe the revenue contribution in FY24 will be about $30 million, with $7 million-$9 million in EBITDA, which we believe implies a mid-teens EBITDA multiple on the acquisition."
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