Terra Firma and Canada Pension Plan Investment Board Agree to Sell Portfolio of AWAS Aircraft to Macquarie Group

LONDON, UNITED KINGDOM and TORONTO, ONTARIO—(Marketwired – March 3, 2015) – Terra Firma and Canada Pension Plan Investment Board (CPPIB) announced today that AWAS, a Dublin-based aircraft lessor, has signed an agreement to sell a portfolio of 90 aircraft to Macquarie Group Limited for a total consideration of US$4 billion. The sale is expected to close within 12 months and is subject to customary closing conditions.

Terra Firma owns a 75% stake in AWAS with the remaining 25% stake owned by CPPIB. Terra Firma and CPPIB are long-time investors in AWAS, both first investing in the company in 2006, and have worked closely to secure the optimal result in this deal.

The portfolio being sold comprises a fleet of 90 young, predominantly narrow-body aircraft. AWAS, one of the world’s leading aircraft leasing companies, will continue to own and maintain the core of its remaining diversified portfolio of more than 200 modern aircraft and plans to continue to grow its fleet through sale-leaseback transactions with airlines and secondary market aircraft purchases.

“We have transformed AWAS since buying it nine years ago, making it one of the top aircraft leasing companies in the world,” said Guy Hands, Chairman and Chief Investment Officer of Terra Firma. “AWAS has gone from having 156 aircraft with an average age of 12.1 years in 2006 to 314 aircraft with an average age of 4.9 years in 2014; the book value of aircraft has risen from $2.3 billion to $10.7 billion. Meanwhile, EBITDA has risen from $256 million in 2006 to $1,081 million in 2014.”

“Given the nature of the AWAS portfolio and current market conditions, we saw a good opportunity to generate value for our investors through the sale of these 90 young, predominantly narrow-body aircraft. We will continue to grow AWAS in anticipation of our plans to explore appropriate exit opportunities for the remaining business in the coming years,” added Mr. Hands.

“As a longstanding investor in AWAS, we believe this sale is an excellent opportunity to realize the embedded value in this portfolio of aircraft while still retaining an attractive fleet to serve the needs of AWAS’ airline customers around the world,” said Mark Jenkins, Senior Managing Director and Global Head of Private Investments, CPPIB. “Together with Terra Firma, we look forward to working with the management team to continue growing the AWAS business.”

Ray Sisson, President & CEO AWAS, commented on the transaction, “Terra Firma and CPPIB have worked with us to reengineer AWAS into a world-class commercial aircraft leasing platform with over 100 airline customers in over 45 countries. Today our business is known around the globe for innovation and a dedication to customer service delivering customized solutions. The sale of this 90 aircraft portfolio is part of our strategic plan and will allow us to move into our next phase of planned growth.”

Goldman Sachs and Deutsche Bank acted as financial advisors to AWAS. Milbank acted as legal advisors to AWAS.