Aviation Week & Space Technology - 3 November 2014

Paul Seidenman San Francisco

Coatings Conglomerate

Going Global

Next steps could be in Asia,

Middle East or OEM work

W

ith its acquisition of Eirtech

Aviation in June for an un-

disclosed sum, private equity

firm Vance Street Capital is staking out

a global presence in the commercial air-

liner exterior paint and interior refur-

bishment market. Eirtech is headquar-

tered in Shannon, Ireland, and has paint

facilities in Shannon, Dublin, Rome, and

Ostrava in the Czech Republic.

The acquisition is the latest devel-

opment in Vance

Street Capital’s

ongoing focus

on the aircraft

painting business,

which, within

the past two and

a half years, in-

cluded the rollup

of Costa Mesa,

California-based

Leading Edge Aviation Services and

Associated Painters, headquartered in

Spokane, Washington. The three com-

panies will operate as components of

International Aerospace Coatings Hold-

ings, but retain their brand names and

management, according to Brian Mar-

tin, a Vance Street Capital principal.

“Eirtech has a great management

team that has done extremely well in

Europe,” explains Martin. “It is an ex-

tremely process-driven company with

a reputation for high-quality paint and

interior refurbishment work, which we

believe will be a nice growth area for

the company.”

As Martin points out, Vance Street

Capital also liked the fact that Eirtech

was “targeting other parts of the

world” for possible expansion, which

he says “broadens the global footprint”

of the three companies.

“Working together, Eirtech, Lead-

ing Edge and Associated Painters will

provide a consistently superior prod-

uct, and a global management plat-

form to share their resources, best

practices and processes,” he remarks.

Eirtech’s current four European

centers, Martin notes, give customers

the advantage of multiple locations in

closer proximity to their aircraft, which

reduces ferrying costs and ultimately

turn times. The customer base, which

includes commercial airlines, military

and VVIP/head of state transport work,

is expected to grow, and include both

OEM and aftermarket opportunities.

“We are doing a growing volume of

OEM work, specifically on Boeing 787s,

767s, 777s and 737s,” Martin says. “In

fact, I believe there is a great opportu-

nity to get into more OEM work.”

Asked if there are any additional

acquisitions in aircraft painting and

refurbishing being considered, Martin

reports that Vance Street Capital is al-

ways looking at deals that make stra-

tegic sense. “We got into this industry

because we like the business models

and growth processes of the compa-

nies, and we believe we can facilitate

their growth, and expand globally.”

Niall Cunningham, Eirtech Aviation’s

CEO, agrees. “We wanted to provide a

global service, but concluded that we

would get there faster if we aligned

Eirtech with the aircraft painting

companies that were under the Vance

Street Capital umbrella,” he says.

Eirtech Aviation is evaluating on-

airport locations in the Middle East

and Asia. “Based on our experience in

Europe, there is growing demand for

a consistently high-quality product,

along with reliable turn times, which

we could leverage in new facilities as

they grow,” says Cunningham. “That

is what has encouraged us to look into

the Middle East and Asian regions—

and establish a footprint in the U.S.”

Eirtech also expects to grow its air-

craft interior design and installation

business, says Cunningham, who notes

that interior modification services will

be introduced not only at new facilities

but at those in the U.S. “All of that will

happen in tandem with what we are

doing at our European facilities.”

While most Eirtech customers are

commercial airline operators, Cunning-

ham confirms that airframe OEMs, and

major MROs, will become increasingly

important. Along with that, he notes a

trend toward consolidation among air-

craft painters. “Today, airlines want to

deal with companies which can provide

the capacity for fleet-wide painting, and

at the same time they want to work with

a single supplier.”

The International Aerospace Coat-

ings Holdings companies, he points

out, now have 16 hangars at eight lo-

cations, which include four in the U.S.

and four in Europe. “That gives those

three companies the combined capac-

ity to paint 33 aircraft at any given

time, and as many as 1,000 per year,”

Cunningham explains.

Consolidation is coming about, as

demand for aircraft painting remains

strong, according to Rogier van der

Velde, senior service manager, engi-

neering for SGI Aviation in Amster-

dam. “There will always be healthy

demand for aircraft painting slots,

with much of it driven by the leasing

companies.”

In fact, with the growth of operating

leases, typically with 6-12-year terms,

van der Velde says that aircraft are

being transitioned from one opera-

tor to another at younger ages, thus

requiring frequent repainting because

of airline livery changes. “On the other

side,” he cautions, airlines themselves

are saving money on the frequencies of

paint jobs and at the same time, new

techniques allow paint to stay on an

aircraft longer.” c

MRO Edition PAINT

MRO32 AVIATION WEEK & SPACE TECHNOLOGY MRO EDITION NOVEMBER 3/10, 2014 AviationWeek.com/mro

Airbus A320 in front of Eirtech

Aviation’s facility at Ostrava, in the

Czech Republic, the company’s first

paint hangar outside Ireland.

EIRTECH

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