LDC COMPLETES SIGNIFICANT INVESTMENT INTO AIRLINE SERVICES LIMITED.

Monday 26th March 2012

Leading private equity provider LDC today announced that it has completed a significant investment to support the management buyout of Airline Services Ltd.

With principal bases in Manchester, Gatwick and London Stansted Airports, Airline Services is a long established, leading provider of aircraft interior and ramp presentation services with expertise in aircraft de-icing, ramp turnaround, cabin maintenance and retrofit services. It supports more than 100 airlines and aviation businesses in the UK and internationally, including industry suppliers and aircraft lessors.

The newly ratified deal is the third transaction completed by LDC Midlands' team using capital from LDC's £200 million manufacturing and specialist engineering commitment.

Airlines Services' Workshop division incorporates the repair and overhaul of cabin interiors, aircraft seats, galley equipment, lighting, in-flight entertainment and other avionic systems from its headquarters at Manchester and London Stansted.

Its Ramp Operations division operates from 12 UK airports, providing aircraft de-icing and other ramp services all aimed at minimising aircraft time on the ground.

Based at Gatwick and East Midlands Airports, the group's Rotable Components business provides a rotable parts and wheels and brakes management and repair capability from a substantial stockholding base.

Established for more than 25 years, the business has been led by Chief Executive Bryan Bodek since the year 2000. In that time it has achieved significant growth across all three divisions as airlines increasingly out-source operations and demand for cabin MRO services increases.

The business is now well-positioned for future growth, with a record order book and annual turnover approaching £60million.

The deal was led by Investment Director Steve Aston, alongside Jon Pickering and Andy Lyndon. Steve Aston and Jon Pickering will join the ASL board with immediate effect.

Commenting on LDC's investment, Bryan Bodek, Chief Executive of Airline Services, said:

"LDC's investment and support brings additional strategic input and financial backing to our business which will help us to deliver our ambitious growth plans. As well as increasing the pace of organic growth, we are now keen to pursue a number of bolt-on acquisitions to broaden our service offering and position the business with new customers in the UK and overseas."

Steve Aston, Investment Director LDC, said:

"Airline Services is a market leading business with an impressive and unique service proposition. Its integrated 'turnaround' services model is increasingly being adopted by scheduled airlines as well as those in the low cost sector. The market dynamics around cabin maintenance and retrofit have been very strong for some time and are expected to improve as the number of aircraft in service increases. We are backing an excellent management team and look forward to working closely with them to support their organic and acquisitive growth strategy."

Reflecting on the completion of another successful new investment using funds from LDC's specialist engineering and manufacturing initiative, Martin Draper, LDC's UK New Business Managing Director added:

"This is an off market transaction sourced through our network of longstanding relationships. Airline Services operates in a sector that we understand very well following on from our investment in AIM Aviation. This deal represents the third transaction from our £200million specialist engineering & manufacturing commitment and confirms our long term approach which is to partner with high quality management teams looking to private equity as a source of funding to facilitate the growth of their businesses."

Boston-based CSP provided commercial and strategic due diligence, Peter McLintock at Squire Sanders provided legal advice to LDC, with Tremayne Ducker at Zeus Corporate Finance advising management and Newco. Pinsent Masons provided legal advice to the vendors.

About Airline Services:

Airline Services comprises five main divisions - Ramp Operations (de-icing, interior and exterior cleaning, carpet fitting, presentation and laundry); Engineering and Workshop activities (EASA 145 repair and overhaul of seats, galley and IFE equipment, EASA 21J & G Design and Manufacture, refurbishment project management); Soft Furnishings specialises in design & manufacture of seat covers, curtains and related accessories. Rotable Component Support - Airline Services Components (ASC) specialises in the supply and management of rotable components including wheels and brakes on the basis of power by hour, exchange, loan, lease or sale agreements, as well as repair management.

www.airline-services.com

About LDC:

LDC is part of the Lloyds Banking Group and is authorised and regulated by the Financial Services Authority. Since 1981 LDC has completed over 400 investments, has ongoing interests in over 60 businesses across the UK.

LDC backs ambitious management teams from UK-based companies seeking between £2m and £100m of equity for management buy-outs, institutional buy-outs or development capital transactions.

LDC invests in a broad range of sectors and has particular experience in Construction & Property, Financial Services, Healthcare, Industrials, Retail & Consumer, TMT, Travel & Leisure and Support Services. It is the leading private equity company in the UK mid-market.

LDC has a UK regional network alongside an international operation based in Hong Kong.

www.ldc.co.uk