ACE sells 70 percent stake in maintenance

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Brick Head
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ACE sells 70 percent stake in maintenance

Post by Brick Head »

Air Canada parent ACE sells 70 percent stake in maintenance subsidiary ACTS

The Associated Press
Friday, June 22, 2007
MONTREAL: Air Canada parent ACE Aviation Holdings Inc. is selling a 70 percent stake in ACTS LP, its aircraft maintenance, repair and overhaul subsidiary, for $683 million Canadian (US$639 million, €475.4 million) to a consortium that includes KKR Private Equity Investors.

The deal, also involving investment firm Sageview Capital LLC, values ACTS at $975 million Canadian (US$912 million, €678.5 million).

ACE will retain a 30 percent stake in ACTS, while Air Canada will remain its largest customer.

ACTS's customers include Air Canada, Canada's Defence Department, Air Transat, JetBlue, US Airways and United Airlines. It has maintenance centers in Montreal, Toronto, Winnipeg and Vancouver, along with El Salvador, with a workforce of 4,800.

"This transaction is an important step in ACE's strategy of unlocking the value in all of our businesses," Robert Milton, the holding company's chairman and CEO, said Friday in a release.

Maintaining a minority share in ACTS furthers ACE's strategy of generating additional value for shareholders by developing the maintenance subsidiary as a stand-alone business, he added.

"Among their many successes, KKR and Sageview have a track record of helping businesses that were once part of large conglomerates to become bigger, stronger and more competitive as independent organizations," Milton said.

KKR and Sageview's other Canadian investments have included Shoppers Drug Mart and Yellow Pages Group.

"This investment brings us closer to our goal of establishing ACTS as the leading independent aircraft maintenance provider in the Americas," said Chahram Bolouri, chief executive of ACTS.

Since Canada is a mature market for the airline maintenance business, the company will have to leverage its capabilities and expand internationally to capture a larger share of the US$18 billion (€13.39 billion) market in North and South America, he added.

The transaction is expected to close during the third quarter of 2007, subject to customary closing conditions and regulatory approvals.

Sageview Capital LLC is a US$1.35 billion (€1 billion) private investment fund founded in 2006 by Edward Gilhuly and Scott Stuart, both formerly KKR partners. It has offices in Greenwich, Connecticut and Palo Alto, California.

KKR is one of the world's oldest private equity firms specializing in management buyouts, with offices in New York, London, Paris, Hong Kong and Tokyo. It has completed more than 150 transactions with a total value exceeding US$279 billion.
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Jaques Strappe
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Post by Jaques Strappe »

What else can we sell? I think there are some computers in the back of flight planning that aren't being used, oh wait, they are leased. :roll:

I remember Miltons' speech telling us that if Onex were to win control of Air Canada, it would break the company apart and sell it off piece by piece. That would be a really bad thing, therefore we need to work together to fight the Onex bid.

What an Asshole.

At least Gerry didn't hide his intentions.
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tonysoprano
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Post by tonysoprano »

...ya but Jaques, Gerry probably didn't offer Milton the kind of bonuses these guys did. He may be an asshole, but his mamma raised no fool.
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Jaques Strappe
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Post by Jaques Strappe »

Hi Tony, I agree with you but I guess it depends on how you rank a fool.

He has certainly made a fortune on the backs of employee concessions but completely lacks any integrity, honesty or respect from the people in his company. In my books, he is a fool but we are even bigger fools for having ever believed in him. His departure is imminent, his legacy will continue. I doubt it will speak fondly. I guess time will tell. :wink:
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tonysoprano
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Post by tonysoprano »

You could be right JS. Consider that anywhere he goes now, his reputation will make it difficult for him in many ways, especially with labour groups. I'd say in the end he may not have done himself any favours except for the quick millions at AC. And half goes to the ex anyways.
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BigB
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Post by BigB »

Ah yes. I can recall vividly...the AC gates agents proudly and somewhat defiantly, wearing the distinctive 'No-to-ONEX' buttons on their lapels. Has it been....what.....5 years ago already?!

The naivety....

And to see the ones who were slagging Gerry then, are finally seeing the truth, is truly gratifying.

A word of advise, if you care....."Never invest in an airline! Instead, invest in the people who invest in an airline."

Tony, I think you are finally beginning to see the light...market forces rule.

BigB

P.S.: Do you guys honestly think that Robert, while sitting on the beach of his private island, will look back at his "legacy"? Only those with integrity stand the test of time. That, in essence is the definition of integrity. The name "Kelleher" (sp) comes to mind.
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tonysoprano
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Post by tonysoprano »

BigB.
Ah yes, it was just a matter of time. Market forces? Ok. That too. We are generally saying that AC's future in the hands of vultures, and sorry but yes that includes your friend Gerry, was to take a turn for the worse as it has. IMHO the best thing would have been to ride out the downturn as AC has done for decades. Who knows? The topic here is Milton and others and how they made themselves richer on the backs of employees, not how Gerry would have saved us. Market forces? Whatever. I know Gerry was sympathetic to CAIL and many ex Canadian employees would have loved to see him take over but I think we would still be having this conversation had he taken over. I'm beginning to see what light? I saw this coming the day Milton put us in CCAA. No I'm not a fan of Gerry's and that's not because I'm an original AC but because I don't think he's any different than the cronies we have now.
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Hadji Ramjet
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Post by Hadji Ramjet »

Half goes to the ex? Did Milton get divorced?
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tonysoprano
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Post by tonysoprano »

Apparantly. Rumor has it he was seeing an FA. But let's be fair and not speculate too much. The rumor of the split with the wife is well known. I think she whent back to Boston.
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Inverted2
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Post by Inverted2 »

Dating F/A's eh? The guy must be a pilot, too lazy to masturbate! :lol:
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tonysoprano
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Post by tonysoprano »

Inverted2 wrote:Dating F/A's eh? The guy must be a pilot, too lazy to masturbate! :lol:
are you a friend of toolow?
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