Fly Leasing Jumps on Accord to Be Bought by PE Firm Carlyle

Carlyle Group's aviation fund agreed to pay $17.05 a share, or $520 million, cash for Fly Leasing.
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Shares of Fly Leasing  (FLY) - Get Report jumped after the commercial aircraft leasing company agreed to be purchased by an affiliate of the Washington private equity firm Carlyle Group.  (CG) - Get Report

Carlyle Aviation Partners will pay $17.05 a share cash, valuing the equity at $520 million. The enterprise value of the deal is $2.36 billion. 

The deal price reflects premiums of 29% to FLY's closing price on Friday and 43% to the volume-weighted-average share price of the past 30 trading days.

At last check American depositary shares of Fly Leasing, Dublin, were 27% higher at $16.79.

"We believe in the long-term resilience of the aviation industry," Robert Korn, president and co-founder of Carlyle Aviation Partners, told Reuters. 

"History tells us when we get past a crisis, we will see a return of traffic as people return to traveling. We think we are buying this at an attractive price." 

The deal, which is expected to close in the third quarter this year, will use funds from Carlyle Aviation's fifth aviation fund, Sasof V. 

Fly Leasing buys aircraft and leases them out under contract to airlines around the world. The company's fleet consists of 84 aircraft, including Airbus A320 EADSY and Boeing 737 MAX models

Carlyle Aviation Partners was founded in 2002 and has $6.1 billion of assets under management. Some 93 airline companies lease its planes. 

"This transaction represents strong value for FLY shareholders at a time when airlines are facing an extremely difficult environment and smaller aircraft lessors are disadvantaged in the debt markets," Fly Chief Executive Colm Barrington said. 

"After a thorough review and evaluation of its options, FLY's [board] enthusiastically recommends this transaction to its shareholders."

The deal is subject to conditions including regulatory clearances.