AAR (AIR) investor relations material

Transaction overview

• Agreed to acquire a 65% controlling interest in MRO Holdings at a $4.0B enterprise value; existing shareholders retain 35%.

• The initial 65% stake is financed with new debt and equity, including ~$780M of shares issued to sellers and an additional ~$230M PIPE.

• Closing is expected in fiscal Q3 ending February 2027, subject to customary regulatory approvals; MRO Holdings debt, except local working-capital facilities, will be repaid at closing.

• Call options cover an additional 5% and the remaining 30% in three 10% tranches on the second, third and fourth closing anniversaries; the latter options use a 13.5x floor and 15.25x cap on LTM EV/EBITDA.

Strategic fit and operating platform

• The acquisition strengthens the aviation aftermarket platform across Parts, Repair and Software, adding scale in airframe MRO, OEM distribution channels, cross-selling opportunities and data for software solutions.

• Combined operations span 12 facilities and 19M annual service hours, up from 7 facilities and 7M hours; annual aircraft serviced rises from ~1,200 to nearly 3,000.

• MRO Holdings operates five airframe MRO facilities across Colombia, Mexico and El Salvador, with 12M annual service hours and ~90% of sales to U.S. customers.

• MRO Holdings reported LTM June 2026 adjusted operating revenues of $1.024B, adjusted EBITDA of $291M and a 29% adjusted EBITDA margin.

• The combined repair opportunity is framed within a $50B+ addressable market, with demand supported by travel growth, mandatory maintenance, aircraft delivery constraints and limited network capacity.

Financial impact and deleveraging

• FY2026 pro forma adjusted sales are shown at $4.4B and adjusted EBITDA at $685M; adjusted EBITDA margin rises from 12% standalone to 16% before synergies.

• Run-rate cost synergies are estimated at ~$75M by FY ending May 2030; ~$64M is expected within 24 months and is included in the close leverage estimate.

• Pro forma net leverage is estimated at ~3.8x at close and ~3.0x within two years, including phased synergies, with a medium-term target of 2.0x-2.5x.

• Preliminary unaudited TTM pro forma figures through August 2026 show adjusted sales of $4.513B and adjusted EBITDA of $769.1M, including $64M of synergies.

• Excess MRO Holdings cash flow is expected to repay the intercompany loan during the first two years after closing; subsequent cash may support repayments or distributions, depending on MRO Holdings net leverage.