Resilience buys stake in aircraft parts company

Resilience Capital has acquired an aircraft parts distributor that may benefit from US sequestration, which could limit the military’s ability to buy new aircraft, says co-CEO Steve Rosen.

Resilience Capital Partners has acquired a majority stake in Aerospace Products International, a Memphis, Tennessee-based aviation parts distributer. The deal is Resilience Capital’s sixth platform transaction from its third fund, which closed on $222.5 million last year. 

The firm did not disclose financial details of the transaction.

Aerospace Products International distributes aircraft parts to manufacturers, maintenance providers and operators in the aerospace industry. The company will serve as an aerospace platform for Resilience Fund III, which is 40 percent invested, Resilience Capital co-CEO Steve Rosen told Private Equity International.

Resilience plans to build the company through a series of complementary add-ons, Rosen said. Aerospace Products International’s president and chief executive officer Andrew Trosper will remain with the company, which is expected to benefit from a decline in airline carrier acquisitions of new aircraft, according to a statement. 

The investment may also receive a boost from US sequestration efforts, which involve defense budget cutbacks that could limit the military’s ability to build and acquire new aircraft, Rosen said. The military’s reliance on older aircraft would create a boon for companies like Aerospace Products International, which distributes the parts needed to maintain those aircraft.    

“For the most part, our investment thesis is predicated on after-market support. And most concern coming out of Washington is about new aircraft,” he said. “This is more aligned for the after-market, the fleet that’s already out there and in service today. So if anything we think [sequestration] will help the investment, even though we don’t want to see anything hurt aerospace industry as a whole.”

The aircraft parts sector has attracted a fair amount of industry attention as of late. In February, Apollo Aviation Group held a final close on $595 million for its Sciens Aviation Special Opportunities Investment Fund II, which acquires airplanes that have been in operation for between eight and 20 years. 

“We monetise the retirement of those airplanes by disassembling them and selling the parts,” Apollo Aviation managing director David Treitel told Private Equity International.

Resilience Capital specialises in investments in niche manufacturing and business services companies located in the US Midwest and Mid-Atlantic regions, according to a release. The Cleveland-headquartered firm is managed by Rosen and Bassem Mansour and has $320 million in assets.