The security company formerly known as Blackwater shed its aviation division on Thursday, selling the unit for US$200 million to AAR Corp in a bid to strengthen the firm’s balance sheet.
Illinois-based AAR will get two aviation units that operate under the umbrella name of Aviation Worldwide Services. That division has a fleet of 58 aircraft, many of which were used under US government contract in Afghanistan for Blackwater, which now operates under the name Xe Services.
“This sale allows for Xe, and its new management team, to move forward on a firmer economic basis while continuing to focus on its core competency of providing the highest quality training for its customers,” Xe spokesman Mark Corallo said.
AAR Chairman and CEO David Storch said in a statement that the market for government aviation “represents a tremendous growth opportunity.” The company anticipates that the new business line will generate approximately US$175 million of revenue annually.
“This acquisition represents a significant milestone in the expansion of AAR’s value-added capabilities for government customers,” Storch said in a statement.
Aviation Worldwide Services includes two subsidiaries, Presidential Airways and STI Aviation. AAR said that Presidential Airways has flown more than 70,000 missions worldwide, transported 270,000 personnel and delivered 23 million kilograms of cargo and mail since 2005.
Although Blackwater got its start training military and law enforcement at its compound in North Carolina, company officials had cited its aviation division as a point of focus as recently as early last year, hoping it would help carry the firm toward US$1 billion in annual revenues.
Executives said at the time that they saw growing demand for services in hotspots such as Afghanistan and West Africa, where bad infrastructure increased demand for aviation support.
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