Sats sells US military contractor unit Maytag Aircraft for US$46 million

INFLIGHT caterer and ground handler Sats has sold its ground handler unit Maytag Aircraft for an enterprise value of US$46 million to private direct investment firm Albion River, it announced in a Saturday (Mar 16) bourse filing.

Maytag provides aircraft refuelling, fuel storage, base operations support, support, ground handling and weather observation and forecasting services as a contractor for the US Department of Defense, at its US and international military bases.

It was acquired by Worldwide Flight Services (WFS) in 2021, which was in turn acquired by Sats in 2023.

The buyer, Albion River, is a “private direct investment firm focused on acquiring companies that produce highly technical defence products and services”.

“Maytag operates on a standalone basis and outside of the group’s core businesses and competencies,” said Sats. “The sale of Maytag is in line with Sats’ strategy, following the acquisition of the WFS Group, to streamline operations, leverage operational synergies and improve financial performance.”

Based on Sats’ unaudited financial information for the first half of 2024, ended Sep 30, 2023, Maytag has a book value of S$76 million and a net tangible asset value of S$24.7 million.

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For illustrative purposes, Sats’ net tangible liabilities per share would have been S$0.81 instead of S$0.793, had the sale been effected as at Sep 30 last year.

Assuming the transactions had taken effect from Apr 1, 2023, the group’s loss per share for H1 2024 would have been S$0.69 instead of S$0.52.

The company will be booking gain on disposal of about S$1.6 million. Net proceeds from the sale, which was completed on Mar 15, will be approximately US$45.6 million. Maytag will also pay a dividend of US$3.2 million to Sats.

The funds will be used “to deleverage and/or expand the group’s existing core business”.

Said Manfred Seah, chief financial officer of Sats: “This divestment is part of our efforts to rationalise our portfolio to concentrate on core businesses that have a strategic fit for the group, focusing on high-value segments that will drive sustainable growth.”

Sats closed down S$0.01 or 0.4 per cent, at S$2.55, on Friday.