Farnborough, England, — Gama Aviation, the British aerospace company based in Farnborough, has inked a substantial deal, selling its U.S.-based maintenance, repair, and overhaul business to private equity-backed West Star Aviation for approximately $131 million. This significant transaction, facilitated by the legal counsel of Latham & Watkins LLP, is poised to "materially benefit the group's stakeholders."

Gama Aviation (Eng) Inc., which operates under the name Jet East, is at the heart of this lucrative deal. The sale is expected to result in net proceeds of around $100 million, creating a buzz in the aviation industry.

West Star Aviation Enterprises LLC, the private equity force behind the acquisition, received expert guidance from Latham & Watkins LLP throughout the process. Legal representation details for Gama Aviation were not immediately available.

Marwan Khalek, Gama's Chief Executive, shared insights into the decision to seal the deal with U.S. private equity firm The Sterling Group, the driving force behind West Star Aviation. He noted that this strategic move came about after several discussions with interested parties.

Khalek added, "The board and I have long since believed that the group has significant underlying value, and the resultant proceeds from this transaction clearly affirm this perspective."

He also highlighted the broader strategic implications of this deal, stating, "This deal provides Gama Aviation the appropriate capital to allow us to capture the tremendous opportunities we have in our Special Mission, Technology & Outsourcing, and Business Aviation strategic business units."

Gama Aviation, a company listed on the London Stock Exchange, has announced that the sale is subject to shareholder approval. A general meeting has been scheduled for November 3 to seek this vital approval. An encouraging factor for the deal is that shareholders representing 50.3% of its shares have already committed to voting in favor of the agreement, slightly surpassing the required 50% mark.

Gama Aviation's journey led to this significant transaction, having acquired Jet East in 2021 for around $12 million. This purchase followed the sale of its U.S. aircraft management business to WheelsUp. Gama consolidated Jet East's operations with its existing maintenance activities in the United States, investing a noteworthy $25 million to support its growth. This investment also facilitated the establishment of new facilities in Millville, New Jersey; Las Vegas; and Statesville, North Carolina.

Jet East, in its latest financial reports, achieved impressive sales figures, amounting to $118.2 million in 2022 and $70.7 million in the first half of 2023. West Star Aviation's acquisition of this business is on a cash and debt-free basis, allowing Gama to retain Jet East's cash and debts. The $131 million deal includes provisions for covering $24 million in transaction costs and "third-party obligations," along with $7.7 million allocated to the management of Jet East, as per the agreement signed at its 2021 acquisition.

Furthermore, Gama Aviation intends to allocate at least 55 pence per share from the net proceeds to its shareholders post-transaction. The news of this momentous deal has spurred Gama's share prices on the Alternative Investment Market of the LSE, with shares trading at 82.50 pence per share, a notable 57.14% increase from the previous day's closing price of 52.50 pence per share.

Dial Partners LLP, a London-based firm, is acting as the financial adviser to Gama Aviation. The legal team from Latham & Watkins LLP, spearheading the corporate deal on behalf of West Start, was led by Houston partners Bruce Herzog and Nick Dhesi, along with London partner Douglas Abernethy. The Bay Area partner Katharine Moir, New York partner Bradd Williamson, and Washington, D.C., partner Jason Cruise also played integral roles in the deal.