Key Highlights

● AAR will acquire 6,500 shares representing 65 percent of MRO Panama, with an option to buy a further 5 percent.

● Consideration is $1,819,174,310 in cash plus 5,783.894 shares of non-voting Series A Convertible Preferred Stock valued at $780,825,690.

● The private placement of 2,215,791 common shares at $104.50 raises about $231,550,159.50 and is expected to close October 1.

● The 10-Q reports sales of $918.0 million for the quarter ended August 31, 2026, up from $739.6 million.

AAR Corp (NYSE:AIR) has agreed to buy a 65 percent controlling stake in MRO Holdings, Inc. and its Panamanian operating company, and to raise part of the cash through a private placement of common stock. The deal was disclosed in an 8-K covering September 28, 2026, and AAR filed its quarterly report on Form 10-Q for the period ended August 31, 2026 the same day. The company's press release puts the implied enterprise value at $4.0 billion.

The Purchase Agreement

Under a Share Purchase Agreement dated September 28, 2026 with seller MROH Intermediate Holdco LLC, AAR will acquire 6,500 shares representing 65 percent of the issued and outstanding shares of MRO Panama, with an option to acquire a further 5 percent at any time before or after closing. Consideration is $1,819,174,310 in cash, subject to working capital and other customary adjustments, plus 5,783.894 shares of newly designated non-voting Series A Convertible Preferred Stock valued at $780,825,690. A $22,500,000 escrow deposit covers post-closing adjustments.

AAR expects to close in its fiscal third quarter ending February 2027, subject to regulatory approvals and customary conditions, including certain pre-closing restructuring within the MRO Panama group. The filing says the acquisition "is not subject to any financing condition" and that a debt commitment letter provides fully committed financing for a portion of the cash price. If the deal fails because of competition law approvals, AAR must pay $100,000,000, or $150,000,000 if it has extended the outside date, which is September 28, 2027 and can be extended.

The press release, Exhibit 99.1, describes MRO Holdings as a global aircraft maintenance, repair and overhaul provider with about 10,000 employees and facilities in El Salvador, Mexico, Colombia and the United States. It gives calendar 2026 projections of $1.0 billion in sales and $285 million of adjusted EBITDA. John M. Holmes, AAR's Chairman, President and CEO, is quoted as saying, "Heavy maintenance is a foundational element of this platform, driving revenue to all other areas."

Governance, Options and the PIPE

At closing, AAR and the sellers will enter an amended LLC agreement for MRO Holdings. It provides for an eight-member board of managers, with AAR designating five and the sellers three, so AAR managers will hold a majority of votes. AAR also receives staged call options over the sellers' remaining equity, starting on the second anniversary of closing, and the sellers have put rights after the sixth anniversary if they hold at least 10 percent of the units and AAR has not exercised its options.

Holders of the Series A preferred stock, who are indirect equityholders, will sign stockholder agreements. Their shares face transfer restrictions for 18 months, with 33.3 percent transferable after six months and 66.7 percent after 12 months.

On the same date, AAR signed securities purchase agreements to sell 2,215,791 common shares at $104.50 per share, or about $231,550,159.50 in gross proceeds, in a private placement expected to close October 1, 2026. Proceeds will fund part of the cash purchase price. AAR relies on Section 4(a)(2) of the Securities Act and must file a resale registration statement within 30 days after that closing, extendable to 90 days. The press release says the offering was led by The Pritzker Organization.

The Quarterly Report

The 10-Q reports sales of $918.0 million for the quarter ended August 31, 2026, up from $739.6 million a year earlier. Gross profit was $176.3 million versus $133.7 million, operating income was $72.1 million versus $64.9 million, and net income was $40.1 million versus $34.4 million. Diluted earnings per share were $1.00 versus $0.95. Operating cash flow was $55.8 million, compared with negative $44.9 million a year earlier.

AAR Sets Its Sights on MRO Holdings Control

The private placement is expected to close October 1, 2026, and the resale registration statement follows within the stated timeline. The acquisition itself depends on regulatory approvals and is expected around February 2027. The outside date is September 28, 2027, unless extended.