The MRO (Maintenance, Repair, and Overhaul) sector is experiencing increased merger and acquisition (M&A) activity driven by a surge in commercial passenger numbers, deferred maintenance, and slower-than-expected aircraft manufacturing.
This trend is expected to persist for several years, extending beyond pandemic-related reactions. Private equity (PE) investment in aerospace and defence is growing, with notable deals like Apollo Global Management and Air France’s $500 million investment and Heico’s $2.05 billion acquisition of Wencor. Industry experts anticipate heightened MRO deal-making for at least three to five years, driven by a desire for travel, older airplane fleets awaiting new deliveries, and the need for deferred maintenance from the COVID-19 era.
Despite a regression in overall aerospace and defence industry M&A activity, MRO-related deals are gaining momentum, with a focus on aftermarket, component repair, and digitalization. The sector’s resilience and cash flow stability make businesses with MRO exposure attractive to investors. Digitalization, engine MRO, and the expansion of digital capabilities in MRO companies are emerging themes, indicating a broader scope for M&A motivations beyond the initial surge in private flying during the pandemic.
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