Sharon Green was on the General Electric Co. transition team following the sale of GE Capital Aviation Services to Irish aircraft leasing giant Aercap, a deal worth $30 billion.
As the transition period was winding down, Green received several calls from a headhunter representing Platinum Equity. It was seeking an experienced executive to run Unical Aviation, which Platinum Equity acquired in July 2021. The Small Cap investment team led the acquisition.
But Green ghosted the calls – she readily admits to a previous negative perception of private equity. But on the third call, the recruiter identified herself as working for Platinum Equity. Green recalled a friend, who had worked for one of the firm’s portfolio companies, speaking highly of the firm based in Beverly Hills, Calif.
After Green was named CEO at the global supplier of aftermarket aircraft parts and services in January 2022, she studied the possibility of moving the company from its City of Industry headquarters in the suburbs east of Los Angeles.
After presenting cost justifications to Platinum Equity Managing Director Dori Konig, Unical Aviation decided to relocate to Glendale, Ariz. Earlier this year, 18-wheelers began loading more than 85 million spare parts from the company’s warehouse.
“We had 30 to 50 trucks moving continuously for about 16 weeks,” Green said. “We joked that we may have created a blip in the transportation market in California for a couple of months.”
The restructuring didn’t stop there.
The company has completed two acquisitions – Arizona-based CAVU Component Repair in 2022 and this year’s Miami-based iAeroThrust LLC, the latter renamed QuickTurn as part of a joint venture with New York-based FTAI Aviation Ltd.
She also recruited an executive team with resumes built with top industry players within the used serviceable materials (USM) market to get the company thinking globally.
Momentum from the restructuring has helped the company return to operating at pre-pandemic levels.
“We’ve focused on operations and efficiency, and had no layoffs,” Green said.
She’s now eyeing a fast-growing spare parts business that is experiencing rising global sales because of a broad recovery in air travel, with Asia becoming an emerging market for Unical Aviation.
Green recently discussed changes at Unical Aviation, her vision for the business and thoughts on private equity and how Platinum Equity stands out.
(Answers have been edited for clarity and length).
PE: Why were headquarters moved?
Green: Our entire global operations were centered in Los Angeles which has a high cost of doing business. Lease rates in the City of Industry were some of the highest in the nation and rising. We explored other aviation hubs and determined moving into neighboring Arizona produced significant financial savings without lengthy disruption to the business. As an added bonus, we discovered access to trained labor, from mechanics to accountants, was much improved.
PE: Why did you join Unical?
Green: I wasn’t looking. But then a headhunter called. They called and called, and finally mentioned Platinum Equity. One of my very good friends worked for a different portfolio company of Platinum, and she sang Platinum praises.
Based on her recommendation, I took the call and visited Southern California and found Unical to probably be one of the best-kept secrets I have ever seen in the aviation business – a gigantic parts facility, maintenance, repair and overhaul operations (MRO) with wide body hangars, a parts manufacturer approval business and a very knowledgeable team. I had begun my aviation career at a family-owned business that was ultimately acquired by GE, so knew firsthand what that team was going through. It felt like a perfect match.
PE: What was difficult for you to understand when you arrived at Unical in early 2022? What were some of the key issues that you identified?
Green: Before Platinum Equity, the company was family-owned and operated. The owner was a true entrepreneur with true vision, and he directed nearly every aspect of the company. He was highly respected by the team and rarely questioned. When I joined, that respect (for the position) rolled over to me. Coming from a highly collaborative environment with constant questioning such as ‘what if we tried this or that’, I had to learn in a hurry when I questioned trying a different method, we were using that different method the next day. Sometimes even if the people involved knew it had failed in the past, things were changed because I suggested it – out of respect for the position. I learned to preface my ‘what-if’s’ with ‘don’t change anything yet.’
PE: How much time have you invested in hiring senior leaders? Is hiring where you want it, and how important is this process?
Green: When Platinum arrived, the existing management team at Unical was tired and discouraged. They had invested heart and soul in a business where they planned to retire, had navigated the pandemic, and the sell was a shock. Given it was privately held, none had ever seen financial statements, tracked KPI’s, nor actively participated in running the business. The fast-paced, transformational private equity environment was not something they had signed up for. Many have stayed with the company, however most opted out of executive leadership roles, so we have invested a lot of energy building a new leadership team. This gave us an opportunity, though, to build a diverse group with backgrounds in all the major used serviceable materials players.
PE: Do you feel that that you’re being allowed to make the decisions you want based on your experience as a known leader and executive in the industry?
Green: Yes, and this move is a prime example. When I was interviewing with Dori Konig, I questioned the sustainability of a California locale. Dori considered that a ‘next owner’ decision given Unical’s large footprint. But when Platinum’s Dan Krasner passed along a third-party real estate assessment in normal course, we opted to do a deeper dive and initial numbers showed extremely significant savings potential. I put that in front of Dori, and he was immediately on board.
PE: How will a macroeconomic trend (rising consumer flight demand) impact Unical Aviation? You would assume this would increase the need for airline parts for upkeep, but please clarify?
Green: The more planes are in the air or the higher the flight hours, the higher the need for maintenance, and by extension, for parts. The end of the pandemic had already boosted MRO activity as parked planes began coming back into service, and increased demand is continuing to fuel that improvement. Airlines and shops came out of the pandemic far more cost conscious, so those who would previously have defaulted to original equipment manufacturer parts are now turning to USM providers. We are seeing a huge uptick in business.
PE: Does Unical Aviation see opportunities for growth in the Asian market?
Green: Unical has historically been most successful on the buy side in the Asia-Pacific region. As age restrictions on parts that may be installed on aircraft are eased, we anticipate a quarter or more of our sales will come from that region.