• Sponsor acquired Aero 3 just before COVID-19
• Completed four add-on acquisitions; grew earnings nearly 4x
• Exited business to strategic VSE for USD 350m EV

GenNx360 Capital Partners’ sale of Aero 3 to VSE Corporation followed a disciplined buy-and-build strategy that nearly quadrupled earnings and transformed the business into a global maintenance, repair and operations (MRO) platform.

The New York-based private equity firm acquired a majority stake in the Manchester, New Hampshire-based company from its Fund III in January 2020. At the time, the target company was a regional player with high single-digit EBITDA, presenting an opportunity for GenNx360 to execute its thesis-driven, buy-and-build playbook in a sector it already knew well.

“What we do is identify large markets, underwrite those sectors, consummate transactions, and then do a buy‑and‑build so we can scale businesses in a very meaningful manner,” Pratik Rajeevan, a principal at GenNx360, told Mergermarket. 

Currently estimated at between USD 100bn and USD 125bn, the aviation MRO market was ripe for this approach. A focus on components with high‑recurring maintenance requirements, essential for keeping aircraft safe, led the firm to Aero 3. Demand for wheel and brake maintenance and repair services is especially high.

“Nothing comes off the plane more than a wheel or a brake,” Rajeevan explained.

Closing the deal just before the outbreak of COVID-19 brought its challenges, but GenNx360 had conviction in the sector’s resilience.

“It did get hit because of passenger traffic, but we were strong believers that these repair and overhaul businesses are essential, critical, and will come back,” added Rajeevan.

Even before closing the deal, the firm had mapped out buy-and-build opportunities, identifying Aircrafters as a natural fit as early as 2018. The New Castle, Delaware-based provider of wheel and brake parts was ultimately acquired in October 2022. It was one of four bolt-ons completed: the others were Dallas Centerline in April 2020, Miami-based Landmerk in October 2021, and UK‑based Skywheels in November 2023.

The acquisitions expanded Aero 3’s addressable market by unlocking new geographies, including further US hubs, as well as Europe and Asia, and enabling narrow and wide-body aircraft services. “Once we provided service in Dallas or Miami, customers who were on the fence because we didn’t have those locations started coming to us,” Rajeevan noted.

To drive organic growth, the firm invested in inventory and took steps to reduce throughput times.

“We transformed the business from a regional airline-focused player to a scaled global player serving the narrow body and wide body markets,” said Rajeevan.

Looking ahead, he added that GenNx360 sees further opportunities to implement its playbook across the A&D landscape, including repair and MRO services, new aircraft shipbuilding, and the aircraft and naval supply chains.

MRO M&A momentum 

GenNx360’s exit comes amid what one sector banker described as a “red hot” aviation MRO space. Last year, Sterling Group notably exited West Star Aviation to Greenbriar Equity Group for around USD 1.5bn, Mergermarket previously reported.

Against that backdrop, inbound interest in Aero 3 began in late 2024 as suitors grew increasingly aware of the platform’s scale.

GenNx360 hired Harris Williams last spring to run a competitive sale process.

Both strategics and financial sponsors were drawn to what Rajeevan described as a “great free cash flow business,” keeping multiple parties in contention as the auction progressed, as previously reported.

“Because of its free cash flow characteristics and growth profile, it could have gone either way,” Rajeevan added.

The deal with VSE was under LOI by October and closed just before the end-of-year holidays.

VSE paid USD 350m for Aero 3. The company disclosed TTM adjusted EBITDA margins “in excess of 20%” for Aero 3, with revenue of USD 120m. Last October, Mergermarket reported that Aero 3 generated around USD 30m in EBITDA.

Rajeevan declined to comment on the company’s financials or terms of the deal.

Miramar, Florida-headquartered VSE was attracted to Aero 3’s diversified customer base, global footprint and strong wheel‑and‑brake MRO capabilities, which build directly on its 2023 acquisition of Desser Aerospace, according to an earnings call after the deal was announced.

“VSE was the most logical long‑term house for Aero 3 given the work they do,” Rajeevan added.