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Rolls-Royce to Buy Airmotive To Expand Global Aftermarket Presence

10 September 1999

Rolls-Royce Agrees to Buy National Airmotive To Expand Global Aftermarket Presence

    WASHINGTON, Sept. 9 -- Rolls-Royce has signed an agreement to
purchase National Airmotive Corporation, one of America's leading aero and
industrial engine repair and overhaul businesses, for $73 million.  The
acquisition, from First Aviation Services Inc. is expected to
enhance earnings per share in the first full year of operation.  It represents
the latest move in the company's global strategy to grow its aero and
industrial engine repair and overhaul business.
    The Rolls-Royce repair and overhaul network presently comprises
14 facilities either wholly or partly owned, on four continents, servicing
48 different types of engines for more than 400 operators every year.  The
acquisition will position Rolls-Royce in new markets, strengthening the
company's position and bringing new customers in both the aviation and
industrial sectors.  National Airmotive had sales of $94 million for the
fiscal year ending January 31, 1999 and carries out repair and overhaul work
on a variety of turboprop, turboshaft, and large turbine aero engines and
industrial gas turbines.
    Ian Lloyd, Managing Director Rolls-Royce Aero Repair and Overhaul, said,
"We are delighted to add National Airmotive to our worldwide network of
aftermarket facilities.  They have a deserved reputation for excellence.  The
acquisition allows us to establish strong positions in Repair and Overhaul
market sectors which are new to us."
    National Airmotive, based in Oakland, California, with 380 employees, has
more than 300 customers in over 45 countries.  The company is an authorized
maintenance center for  a variety of engines including the T56 and Model
250 engines manufactured by Rolls-Royce in North America.  Last year, National
Airmotive won its largest ever contract with business from the U.S. Navy worth
potentially $189 million for the repair of T56 engines.  The T56 is the
strongest selling large turboprop in the world with over 8,500 in service.
    Commenting on the sale, Aaron Hollander, Chairman of First Aviation
Services Inc. said, "We are pleased to be able to conclude our strategic
review of NAC with this significant development.  Rolls-Royce is absolutely
the best long-term owner for NAC and its employees given its strategic
objective to participate in the Rolls-Royce Allison aftermarket."
    The agreement is subject to Rolls-Royce and First Aviation Services
securing the necessary regulatory approvals.