How to Sell Your Aerospace & Defense MRO/Aftermarket Company: A Step-by-Step Guide

Selling an MRO/aftermarket company is a significant decision that requires careful planning, strategic positioning, and expert assistance. Whether you're considering retirement, shifting focus to a new business, or capitalizing on market demand, understanding the selling process is crucial. In this guide, we outline the steps involved in selling a company in the MRO/aftermarket sector, ensuring you secure the best deal and transition smoothly.

Understanding the A&D MRO/Aftermarket Business Sale Process

The sale of an MRO/aftermarket company involves multiple steps, from business valuation to final negotiations. Working with experienced business sale advisors and an industry-specific investment banking firm can ensure a successful exit strategy.

How Janes Capital Partners Can Help You Sell Your MRO/Aftermarket Company

At Janes Capital Partners, we specialize in guiding MRO/aftermarket business owners through the sale process, maximizing value, and ensuring a seamless transition. Our services include:

• Comprehensive Business Valuation: We assess your company’s financials, customer base, and industry standing to determine an optimal price.
• Buyer Identification and Outreach: Leveraging our vast network, we find qualified buyers interested in acquiring businesses in the MRO/aftermarket sector.
• Confidential Marketing & Negotiation: Our team ensures confidentiality while marketing your company and negotiating favorable terms.
• Regulatory & Compliance Guidance: We help ensure that your business meets industry and legal requirements for a smooth sale.
• Seamless Transition Planning: We assist with structuring deals that facilitate a successful handover and business continuity.

Janes Capital Partners has extensive experience advising on M&A transactions in the A&D MRO/aftermarket sector, including:

• Sale of Precision Fuel Components to VSE Corporation (NASDAQ: VSEC)
• Sale of AeroPrecision (now part of AllClear Aerospace & Defense) to Greenwich AeroGroup
• Sale of AAXICO to KAPCO (now known as Proponent)
• Sale of Thermal Structures to HEICO (NYSE: HEI)

In addition, Janes Capital Partners has advised on M&A transactions involving leading aerospace & defense MRO/aftermarket companies including TransDigm, GE, Honeywell, Safran, Parker, Moog, AMETEK and Triumph Group.

Within the A&D MRO/aftermarket, Janes Capital Partners actively tracks and engages in M&A transactions involving: Maintenance, Repair & Overhaul (“MRO”), Parts Manufacturer Approval (“PMA”) & replacement parts, Used & Serviceable Merchandise (“USM”), distribution & logistics, Supplemental Type Certificates (“STC”) & modifications, supply chain management, and other aftermarket services

Step-by-Step Guide to Selling You’re A&D MRO/ Aftermarket Business

Step 1: Assessing Your MRO/Aftermarket business Value

Determining your company's worth is the first step toward selling your MRO/Aftermarket business. Buyers will evaluate key aspects, including:

• Revenue and profitability trends
• Customer contracts and order backlogs
• Equipment, machinery, and technological capabilities
• Inventory, working capital and capital expenditure requirements
• Industry certifications and compliance standards
• Workforce expertise and operational efficiency

Conducting an MRO/aftermarket company valuation with an expert can help you set a competitive asking price and attract serious buyers.

Step 2: Preparing for the Sale

A well-prepared business is more likely to attract higher offers. Preparation steps include:

• Organizing financial statements and tax records
• Reviewing contracts with customers and suppliers
• Ensuring equipment and facilities are well-maintained
• Addressing any legal or compliance issues
• Documenting key operational processes and intellectual property

A properly structured and documented business increases buyer confidence and facilitates a smoother sale process.

Step 3: Finding Buyers for Your MRO/Aftermarket Business

Identifying the right buyer is essential to maximizing your business’s value. Potential buyers may include:

• Aftermarket companies looking to expand
• Private equity firms seeking MRO, distribution or aftermarket investments
• Industry competitors wanting to gain market share
• Family offices and individual investors seeking aerospace MRO/aftermarket investments

Working with Janes Capital Partners can streamline the process of finding qualified buyers and negotiating terms that align with your business goals.

Step 4: Structuring the Deal

Choosing the right deal structure impacts the financial and tax outcomes of the sale. Key considerations include:

• Asset Sale vs. Stock Sale: Determining the best structure based on tax implications and liabilities.
• Payment Terms: Whether the transaction will be all cash, installment-based, or include an earn-out component.
• Transition Planning: Setting expectations for your role post-sale to ensure business continuity.

A carefully structured deal ensures both you and the buyer benefit from a well-negotiated agreement.

Step 5: Due Diligence and Negotiation

Once a buyer is interested, they will conduct due diligence to verify business details. Be prepared to provide:

• Financial statements and tax returns
• Customer and supplier agreements
• Equipment maintenance records
• Employee contracts and HR policies
• Compliance and regulatory documentation

Having organized documentation speeds up due diligence and strengthens your negotiation position. Janes Capital Partners can assist in this process to ensure transparency and a fair deal for all parties.

Step 6: Closing the Sale and Transitioning

The final step is completing the sale and ensuring a smooth transition. This includes:

• Signing final agreements and transferring ownership
• Completing regulatory and legal approvals
• Assisting in knowledge transfer and transition planning
• Communicating with employees and customers about the change

A well-executed transition maintains business stability and sets the new owner up for success.

Common Challenges in Selling an MRO/Aftermarket Business

The sale of an MRO/aftermarket company presents unique challenges, but strategic planning can help overcome them:

• Valuation Discrepancies: Buyers and sellers may have differing expectations of value. A professional valuation ensures fair pricing.
• Finding the Right Buyer: Not all buyers have the necessary industry expertise or capital. An experienced investment banking adviser can help connect you with qualified prospects.
• Managing Confidentiality: Premature disclosure can disrupt operations and impact employee morale. Proper marketing strategies protect business information.
• Extended Sale Timelines: The sales process can take months, requiring patience and professional guidance to navigate efficiently.

Conclusion: Is Now the Right Time to Sell?

Market conditions, industry demand, and your company’s financial health all play a role in deciding when to sell. If you are considering an exit, now could be an opportune moment to sell your MRO/aftermarket business, especially if your company has high margins and is well-positioned for growth.

By working with Janes Capital Partners, you can ensure a well-structured and profitable sale. Our team of business sale advisors and MRO/aftermarket valuation experts is here to guide you through the entire process, from valuation to closing the deal.

Contact Janes Capital Partners today. Our proven track record in helping MRO/aftermarket business owners achieve seamless and profitable exits makes us the trusted partner for your next move.