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Private Equity BBAM-Onex

Published on December 3rd, 2012 | by Ted Liu

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Onex to acquire 50% stake in BBAM from FLY and Summit Aviation Partners

Onex Corporation (TSX: OCX) has agreed to acquire a 50% interest in BBAM LP, the world’s third largest manager of commercial jet aircraft, for US $165 million. The transaction is expected to close by the end of 2012.

Onex will acquire a 35% interest in BBAM from BBAM’s management team and a 15% interest in BBAM from FLY Leasing Limited (NYSE: FLY), a leading global lessor of commercial jet aircraft managed by BBAM with 110 aircraft on long-term operating leases to 53 airlines in 29 countries.

Following the closing of the transaction, BBAM will be owned by BBAM management through Summit Aviation Partners LLC (50%) and Onex (50%).

Onex and BBAM management will also invest $25 million in newly issued shares of FLY at $11.41 per share.

“We’re very pleased to be partnering with Onex given its track record and experience in our industry,” commented Steve Zissis, CEO of BBAM. “With Onex’ backing, we intend to strengthen our market presence, including in particular our unique 26-year partnership with Nomura Babcock & Brown in Japan, while at the same time accelerating growth at FLY.”

“These transactions will generate both significant unrestricted cash for new investments and produce gains on the sale of FLY’s investment in BBAM,” said Colm Barrington, CEO of FLY.

“BBAM is a unique platform in a market we followed closely for several years. We see great opportunity ahead with Steve and his team at BBAM,” said Tawfiq Popatia, Principal of Onex.

On April 29, 2010, BBAM LP/Summit Aviation Partners acquired substantially all of the aviation assets of Babcock & Brown Aircraft Management (BBAM) and its affiliates, and certain other companies that manage and service Fly and its aircraft portfolio.

FLY acquired its 15% interest in BBAM LP for $8.75 million. As part of transaction, Summit Aviation Partners acquired 1,000,000 Fly shares from Babcock & Brown.

Following Onex/BBAM FLY shares purchase, Onex and Summit Aviation Partners collectively will become the largest shareholder in FLY, controlling approximately 11% of FLY common shares.

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About the Author

Ted is an editor of CanadianPrivateEquity.com and Research Director for CVCA - Canada's Venture Capital and Private Equity Association. Ted has been following Canadian venture capital and private equity industry since 1993.



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