(Reuters) - Canadian private equity company Onex Corp OCX.TO said it will acquire a 50 percent stake in BBAM, a manager of commercial jet aircraft, for $165 million.
Onex will acquire a 35 percent stake from BBAM’s management team and a 15 percent stake from Fly Leasing Ltd (FLY.N), an aircraft leasing company that is serviced by BBAM.
The Canadian company said last week that it would buy U.S.-based insurance brokerage USI from Goldman Sachs’s (GS.N) private equity fund for $2.3 billion, to expand its financial services footprint.
Onex said on Monday that it would buy $25 million worth of newly issued Fly shares at $11.41 per share - a 7 percent discount to Fly’s Friday close - along with BBAM.
The deal and share issue will give Fly $75 million in pre-tax gross proceeds, Onex said in a statement. The deal is expected to close by the end of 2012.
The senior executives of BBAM acquired the business from Babcock & Brown BNBX.UL in April 2010 and owned 85 percent of the company before Monday’s deal, according to its website.
California-based BBAM has over 450 commercial aircraft in its managed fleet. BBAM assists Fly in acquiring and disposing aircraft, markets aircraft for lease, monitors maintenance, insurance and other obligations under leases and enforces Fly Leasing’s rights against lessees.
Fly has 110 aircraft on long-term operating leases to 53 airlines in 29 countries.
Shares of Toronto-based Onex closed at C$40.70 on Friday on the Toronto Stock Exchange.
Reporting by Krithika Krishnamurthy in Bangalore; Editing by Roshni Menon