Cobham’s global parent company is reportedly seeking to sell off its Australian business, in a deal expected to be worth over $1 billion.
According to a report by The Australian Financial Review, US-based private equity firm Advent International, which owns UK company Cobham and its Australian branch Cobham Aviation Services Australia, has hired Australian investment bank Macquarie Capital to oversee the sale and seek out potential buyers.
The report suggests the auction will take place in two parts, however, it is unclear if this means that the businesses’ two major units – that being its charter/FIFO operations and its special missions unit – could be sold off separately.
Cobham Aviation Services Australia reported $368 million revenue and $87.2 million EBITDA in the year to December 2020, making it the third biggest player in Australia’s aviation industry behind Qantas and Virgin Australia.
It is understood that Cobham’s special missions unit, which largely includes government contracts for conducting airborne surveillance and search and rescue operations, makes up the majority of the Australian business’ earnings.
Cobham Aviation Services Australia also boasts over $407 million in assets, and 33 aircraft in its fleet.
According to insider sources, Macquarie Capital has already alerted possible interested parties about the impending sale and anticipate that the sale’s value could soar up to $1.5 billion.
The investment bank has highlighted to potential buyers Cobham’s strength in the market and its resilience throughout the pandemic due to its essential service work.
Key players expected to make a move on Cobham include a number of private equity firms that were previously eyeing Virgin Australia in 2020, core-plus infrastructure investors, as well as Alliance Aviation, one of Cobham’s major competitors in the charter and FIFO sectors.
According to the AFR, private equity funds and investment banks have had their eyes on Cobham’s Australian business for a number of years, due to the company’s standing in the aviation sector, its strong asset-base and its government and mining contracts.
Australian Aviation has reached out to Cobham for comment.
Cobham, formerly known as National Jet Systems, has been operating in Australia since July 1990, beginning with an initial fleet of BAe146 aircraft.
Shortly after, it began completing scheduled commercial operations on behalf of Australian Airlines, largely to tourist destinations in the Top End.
Cobham’s fleet grew to include BAe Jetstream, Boeing 717 and Dash 8 aircraft.
The company rebranded to Cobham Aviation Services Australia in 2009, to align with its UK-based parent company Cobham, and later, in early 2020, both Cobham and Cobham Aviation Services Australia were acquired by Boston-based private equity firm Advent International.