With an unrivalled combination of independence, industry expertise and access to unique data, IBA’s insight consistently enables investors, financiers and operators to make better investment decisions. IBA is uniquely positioned to provide critical quantitative and qualitative intelligence on a wide variety of transactions.
The diverse backgrounds of IBA’s professionals combined with our proprietary data access allows us to deliver a comprehensive analysis of companies and markets. Additionally, we identify key negotiation points on the deal, plus areas of opportunity and concern post-completion.
Too frequently, we see acquisitions of aircraft fail to deliver value because the physical asset is not in the condition expected and in some cases has not even been inspected. IBA will examine the critical maintenance records and conduct a thorough physical inspection of the aircraft. Inspections will identify financial and operational exposures which can then be used in acquirer’s next steps, be the renegotiation or identification of new assets.
In 2017, our strategic projects have included:
- Conducting buy and sell side due diligence on both the residual values and the physical condition of the fleets offered.
- Conducting IPO readiness exercises on the robustness of business plans and the valuation of fleets.
- Assessing the quality of assets and operations including inventory, key contracts and the management team.
- Supporting the closing of a number of Asset Backed Securitisations.
- Conducting operator reviews as part of various due diligence exercises.
- Advising on the reserves and return conditions attached to each lease.
Example Case Study
A new investor in the aviation sector wanted to acquire an aircraft operating lease platform consisting of a portfolio of dozens of aircraft of mixed credit risk and vintages. It required a robust valuation of current and future values, commercial analysis of lease exposure, assessment of future income and costs and any concerns with respect to redelivery.
A multifaceted approach was employed by IBA:
1. Providing valuations for multiple types of aircraft with varied risk and liquidity profiles
2. Inspecting the portfolio that consisted of aircraft ranging from new to 15 years old and confirming the maintenance records of the aircraft were as agreed to provide a more accurate valuation
3. Mapping cash profiles in relation to maintenance reserves
4. Scenario planning around redeliveries over the lease period
5. Sensitivity analysis and modelling exercises were performed around the future lease rates and values, maintenance reserves and useful economic life
6. We were embedded as part of the buyer DD team to review management presentations, interview key staff and assess lease management processes
The investor successfully acquired the portfolio, and the management team has subsequently acquired a further 80 aircraft on its platform. Additionally, IBA’s monitoring efforts afforded the client an early exit from a troubled operator.