JOHN Menzies has unveiled what it is calling a “transformational” acquisition for its aviation services business in the form of a $202 million (£155m) deal to buy Florida-based plane refuelling operation ASIG.
John Geddes, company secretary at John Menzies, cited “very strong shareholder support” for the deal, which he noted would increase the Edinburgh-based group’s overall workforce by about 8,000 to around 31,000.
Mr Geddes cited an appetite among John Menzies’ investors for the company to be a consolidator in the aviation services market.
The acquisition of ASIG, from BBA Aviation, is backed by a fully-underwritten, £75m, five-for-14 rights issue at 343p-a-share.
John Menzies has, in recent times, come under pressure from shareholders, some of which have called for the business to be broken up because they believe the aviation services and newspaper and magazine distribution divisions would be worth more apart than together.
The company has seen major changes in its management and board, with Dermot Smurfit unveiled as chairman in July.
The new chairman has said he will examine the issue of whether Menzies’ aviation services and distribution businesses “are best placed to prosper while they are part of one group”.
Mr Geddes said yesterday that this review was “a very complicated piece of work” involving complex pension issues, noting the company was continuing with it.
He signalled the acquisition and the review were separate issues, and said of the ASIG deal: “This is something we have been looking to do for a while.”
ASIG was established in 1947 and is based in Orlando. It services more than 600 customers, including American Airlines, IAG, Delta Air Lines, Shell and United Airlines. In 2015, ASIG fuelled more than four million flights, transporting and pumping more than 10 billion gallons of fuel.
Mr Smurfit said: “This is a transformational deal for Menzies and will significantly increase Menzies Aviation’s footprint globally while also adding fuelling to our operations.”
Shares in John Menzies yesterday jumped by 26p or 4.4 per cent to 618p on news of the deal.
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