BBA Aviation disposes of landing gear business

3rd Feb 2014 08:01

BBA Aviation has sold its APPH entities, a full-service landing gear and hydraulic sub-systems supplier, and announced it was considering a cash return to shareholders. The business, which had formed part of BBA's Aftermarket Services division, was sold for $128m, the $120.6m proceeds of which would be use to reduce the group's debt level. The sale was expected to be marginally earnings dilutive, it said. BBA explained it was "considering" a possible and "appropriate" cash return, and would announce a decision along with its full-year results, which were due to be published on March 5th. Chief Executive of BBA Aviation, Simon Pryce, said: "APPH is the only part of BBA Aviation that is focused on product design and development, with significant manufacturing activities and a higher fixed cost base than the rest of the group. "APPH has made significant operational and financial improvements over the last two years. It has a leading position in its market and a range of growth opportunities, the pursuit of which is better undertaken under ownership more aligned to its products and markets. "We believe that the disposal is a positive development for BBA Aviation and its shareholders as we continue our focus on delivering long-term, sustainable value. We also believe that it is a positive outcome for the APPH business and its employees, offering them the opportunity of a long-term future within a group dedicated to the development and manufacture of landing gear systems and components for the aerospace market."In 2013, APPH contributed revenue of around $76.8m and $7.2m to underlying operating profit. NR