Investment company Baltcap and minority shareholders have decided to sell 100 percent of shares in Magnetic MRO, a full-service aircraft maintenance company headquartered in Tallinn, to China's Guangzhou Hangxin Aviation Technology for €43 million.
The indicative closing time is at the end of March, after all regulatory requirements and other closing conditions have been fulfilled, Baltcap said in a press release on Wednesday.
"The management of Magnetic MRO has been actively seeking opportunities to expand into Asia, the highest growth market in aviation," said Magnetic MRO CEO Risto Mäeots. "Hangxin's location and service portfolio is complementary to Magnetic MRO, creating substantial synergies and new business opportunities. For the management, Hangxin is a perfect match, and we are thrilled to start working with their highly professional and energetic team."
Kristjan Kalda, chairman of the supervisory board of Magnetic MRO and partner at Baltcap, said that under Baltcap's ownership, Magnetic MRO has grown from a small regional player to a profitable global company.
"This is the largest exit transaction in Baltcap's histor, and proves our ambition to create highly competitive Baltic companies," Kalda remarked. "I would like to thank the fantastic team at Magnetic; this strategic move is definitely a huge leap for the company."
"We are very pleased to welcome Magnetic MRO to the Hangxin team," Hangxin vice-president Lv Haibo said. "Magnetic MRO and their team have developed a high-quality, reliable, customer-focused MRO business. We fully support the existing strategy and executive management team, and will support Magnetic MRO's focus on continuing to deliver value to their existing customers as well as expanding their global MRO presence."
The sellers were advised by Superia Corporate Finance, Seabury Securities and law firm COBALT.
Magnetic MRO is a European Aviation Safety Agency (EASA) and Federal Aviation Administration (FAA) certified total technical care and asset management organization offering integrated MRO services. In 2017, Magnetic MRO was titled Estonia's Company of the Year as well as Exporter of the Year.
Based in Guangzhou, Guangdong Province, China, Guangzhou Hangxin Aviation Technology is a privately-owned company providing aircraft component maintenance services. Hangxin services components for over 20 aircraft types and serves over 50 airlines in Asia, Middle East, Europe and North America. Hangxin is listed on Shenzhen Stock Exchange and has a market capitalization over 700 million euros. The management controls 46 percent of the shareholder votes and, along with employees, 61 percent.
BNS reported in October that Baltcap has put its majority holding in Magnetic MRO up for sale. At the time, the fair valuation of the company was estimated to be in the region of €50 million.
Editor: Aili Vahtla