Valuation: AEROSPACE RELIANCE LIMITED

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Aerospace Reliance is a global stockist and distributor of aircraft maintenance consumables, including sealants, adhesives, lubricants, paints and composite materials. It serves airlines, MROs and defence contractors on a 24/7 AOG basis, shipping from a Hemel Hempstead warehouse. Revenue is transactional rather than contracted, but repeat purchase rates appear high given the regulatory nature of aerospace consumables.

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The UK aerospace consumables distribution market, estimated at £400m to £500m annually, sits within the broader aviation MRO supply chain. Demand is driven by three factors: global air traffic recovery, which has now exceeded 2019 levels; fleet ageing, which increases consumable intensity per aircraft; and rising regulatory and OEM requirements for traceable, certified materials.

The market is fragmented, with a handful of scaled specialists such as Wesco Aircraft (now part of Incora), Proponent and Aviall competing alongside dozens of regional stockists. Consolidation has accelerated: Incora was formed through the merger of Wesco and Pattonair, and private equity continues to roll up smaller distributors to create purchasing and logistics scale. Growth is estimated at 6 to 10% annually, supported by airline capex cycles and the shift to next-generation aircraft.

The main structural risk is supply-chain volatility: geopolitical disruption, chemical-ingredient shortages or OEM exclusivity deals can tighten margins or strand inventory. Over the next three to five years, expect continued consolidation and margin pressure as larger platforms leverage buying power.

For a seller today, the window is favourable. Strategic acquirers and PE platforms are actively seeking bolt-ons in aerospace distribution, particularly businesses with niche stock depth and 24/7 AOG capability.

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• Incora (Wesco/Pattonair): global full-line distributor with strong OEM relationships; overlaps on consumables and chemicals (inferred).
• Proponent: US-headquartered, global footprint in MRO consumables; competes on breadth and AOG service.
• Aviall (Boeing subsidiary): broad aerospace parts and consumables; strong OEM backing.
• Aerospheres (parent/sister brand per website): appears closely linked; potential internal overlap.
• Desser Aerospace: specialist in seals, gaskets and consumables; regional UK overlap (inferred).

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Most recent filed accounts: FY2024, made up to 31 December 2024. Filed July 2025, so roughly seven months old at today's date. Given the strong growth trajectory and the seven-month gap, a rolled-forward FY2025 column is included using our assumption of 20%+ revenue growth and a slight margin normalisation.

Reconstructed profit and loss, GBP, figures marked (est.) are derived

• EBITDA
• Additional gross profit
• Cost of sales to total revenue

£22.4m

£5.3m

£28.2m

£5.9m

£35.2m

£6m

FY2023

GP £7.4m · EBITDA £5.3m

FY2024

GP £9m · EBITDA £5.9m

FY2025 (est., rolled forward) (est.)

GP £11.2m · EBITDA £6m

Basis: Revenue and gross profit are filed (full accounts under FRS 102). EBITDA for FY2024 derived as operating profit £5.73m plus depreciation £0.18m. FY2025 revenue rolled forward at 25% (matching FY2024 YoY growth); gross margin held at 32%, admin-cost ratio assumed flat, yielding EBITDA of c.£6.0m. Headcount not disclosed.

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The business carries modest external debt (creditors after one year of £566k, likely HP or term loan given the October 2025 charge filed). Cash of £813k is lower than prior year owing to working-capital absorption; net debt is negligible. Normalised working capital is heavy for a distributor: debtor days appear high (around 150 days on filed figures), though this may include related-party balances. Buyers will adjust for any director loans, and the lean fixed-asset base suggests no surplus property to extract. The equity-to-enterprise bridge is minimal; enterprise value and equity value will be close.

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Aerospace and defence distribution businesses of this scale typically trade at 5.0x to 7.0x EV/EBITDA. Recent precedent: Incora's 2020 combination valued the merged group at approximately 8x, though that reflected a much larger, more diversified platform. For a sub-£50m revenue distributor with strong growth but transactional revenue, 5.5x to 7.0x is appropriate, weighted higher given the 25% top-line trajectory, healthy margins and low capex intensity.

On our assumption of 20%+ growth continuing into FY2025, current-year EBITDA is estimated at £6.0m. Applying a 5.5x to 7.0x range yields an indicative enterprise value of £33m to £42m. If FY2025 growth stalls, the range would compress to roughly £27m to £35m on a FY2024 EBITDA of £5.9m.

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These bars are calibrated for UK SMEs and do not apply to midcap or larger businesses, where the thresholds are very different.

The metric that most limits the multiple today is gross margin: at 32%, it is typical for distribution but well below the thresholds that signal pricing power or proprietary value-add.

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The single highest-return action is clarifying and properly documenting the relationship with Aerospheres, because any intercompany dependencies that are undisclosed will create uncertainty and haircuts at due diligence.

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A trade sale is the strongest route. Global distributors such as Incora, Proponent or Boeing's Aviall are actively consolidating; a well-prepared process could attract multiple bidders and drive competitive tension. For the current owner, pursuing trade means a clean exit within six to twelve months, likely with an earn-out tied to customer retention, but the highest headline price and certainty of close.

At your size expect a structured, competitive auction run by a larger corporate finance house, with full workstream due diligence and international buyers likely on the list. Allow around nine to fifteen months from starting properly to money in the bank.

At this size, process discipline is the value driver. A well run timetable with several credible bidders reaching binding offers on the same day is what produces a premium.