Rex - Regional Express (ZL, Wagga Wagga) has been conducting due diligence for a possible acquisition of Cobham Aviation Services Australia - Regional (Adelaide International) and may make a bid in the coming weeks, sources have told The Australian Financial Review.
The newspaper revealed in February that Boston-based private equity firm Advent International was looking to sell the specialist operator and had hired investment bank Macquarie Capital to oversee the sale, which could fetch more than AUD1.5 billion Australian dollars (USD1.05 billion). Advent bought the Australian carrier’s parent, the British defence and aerospace company Cobham Group, in January 2020.
Two units are reportedly up for sale - Cobham’s cargo and fly-in, fly-out passenger (FIFO) charter services business mainly serving Australia’s mining companies, and Surveillance Australia, which has a long-term contract to provide maritime observations for the country’s border force.
Macquarie has told interested parties that they can bid for one or both of the businesses, but it is the FIFO unit - one of three such carriers in Australia - that Rex has its eye on, the sources said.
Such a deal would be big for Rex, which, funded by Hong Kong-based private equity firm PAG, has also been venturing out of its regional niche to build up its jet fleet and consolidate its presence on Australia’s trunk routes. PAG’s senior convertible notes in Rex could give it a stake of around 47% in the airline if converted.
Contacted by ch-aviation, Rex - Regional Express declined to comment.
Neither Qantas nor Virgin Australia are interested in acquiring Cobham, the sources claimed. Qantas announced last week that it would buy 100% of Alliance Airlines (QQ, Brisbane International), another mining charter operator, in a AUD614 million (USD428 million) deal.
Cobham Aviation Services Australia currently employs about 430 people. The ch-aviation fleets module shows that it operates 21 aircraft: four ARJ-100s, one ARJ-85, one BAe 146-300, five DHC-8-Q400s, three ERJ 190-100ARs, and one ERJ 190-100LR, all of which are wet-leased to Cobham Aviation Services Australia - Airline Services (QJE, Adelaide International), a former Cobham Group unit that Qantas Group acquired in 2020. Cobham Regional also operates four BAe 146-300(QT)s on behalf of Qantas Freight. All of the aircraft are dry-leased except for the BAe Systems equipment.
According to The Australian Financial Review, Cobham Aviation Services Australia Regional is looking to expand and will add four more aircraft in the coming months.
