Milestone For GE: US Aircraft Leasing Unit Buys Dublin Based Helicopter Lease Firm
Milestone For GE: US Aircraft Leasing Unit Buys Dublin Based Helicopter Lease Firm
General Electric's aviation leasing unit has announced that it will purchase Dublin based chopper leasing company Milestone. The Irish Milestone Aviation Group will be purchased for USD 1.78 billion by the US company. Milestone was founded by Richard Santulli in the year 2010. Santulli is also the founder of Net Jets Inc. Milestone Aviation Group owns USD 2.8 billion worth of choppers and has placed orders adding up to USD 3 billion.
Milestone helicopters are used primarily in offshore and gas industries. They are also used in search, rescue and emergency services in medical operations as well. “The addition of Milestone will deepen our domain expertise in aviation and oil and gas, two critical GE industries,” the CEO of GE Capital Keith Sherin was quoted as having said in a statement released on 11th October. GE is now aiming to reduce exposure in financing and expand in other industrial business sectors, according to Reuters. The Reuters report also indicates that this acquisition can go far in accomplishing this.
Group CEO Jeff Immelt has indicated the aim for GE is to boost earning contribution from industrial businesses to 75% by 2016 from 55% in 2013. Earlier in the year, the company had also created a spin-off firm known as Synchrony Financial. General Electric's aircraft leasing division I the largest in the world and with this acquisition, it is looking to put choppers amidst its portfolio of rental assets.
This deal adds around 168 choppers worth USD 2.8 billion to GE Aviation Unit's collection. CEO Immelt's plan to reshape GE has increased focus on industrial businesses and operations within the US firm. Based in Fairfield, Connecticut, this US company is benefiting from the deal as the engines of the choppers are also used by aircraft makers, Norm Liu of GE said, according to WSJ. Milestone also has a lot of clients including operators in offshore and medical operations. It was the co-founder of this company, Santulli who revolutionised the concept of fractional ownership of the aircraft wherein persons and firms buy shares of private planes flying time rather than investing in a private jet, as per Wall Street Journal.
GE is the world's largest diesel locomotive and jet engine manufacturer. It has aims to complete the credit card unit spin-off by next year. Immelt has sold the company's appliances unit and exited real estate as well to focus on higher margins in industrial operations, WSJ analysed.
"The Milestone acquisition is a great fit for GE — it combines Gecas' global reach and 45-plus years in leasing commercial jets with a fast-growing helicopter financing platform," GE Capital CEO Keith Sherin said in the statement to Wall Street Journal. Santulli will be the chairman of the chopper business which will operate as Milestone Aviation Group. He will also join GE as an officer. GE has announced the deal's closure will be by 2015.
