It was buried in one of the sec filings. I guess I should have said 5mill in assets, not necessarily revs
Early in the second quarter management completed the phase out and disposal of its home automation division and completed the acquisition of BallPark. As a direct result of the Ballpark acquisition and subsequent negotiations for funding, the Company was introduced to and approached by Integrity Aviation and Leasing LLC ("Integrity"), a Texas based company specializing in leasing jet aero engines and aircraft parts to the airline industry. Integrity is active in the domestic airline industry with 5 engines under lease, one lease pending, assets in excess of $5 million and strong revenues. On November 22, 2013 the management of Occidental and Integrity executed a Letter of Intent outlining terms for the acquisition of Integrity by Occidental.
Integrity Aviation & Leasing ("Integrity") acquires refurbished and certified jet aero engines and other aviation assets for lease and sale to commercial air carriers. Integrity focuses on engines used by popular commercial jet aircraft such as the CFM56-3/7 series used on Boeing 737s, the JT8D-200 series used on McDonald Douglas MD-80s, and the CFM56-5 series used Airbus A320s. Integrity owns 6 jet engines and associated aircraft parts with an asset value in excess of $5 million. 5 engines are under lease to domestic carriers and 1 engine is in pre-lease testing.
Integrity has a close working relationship with Turbine Engine Center ("TEC"), an established FAA & EASA certified, maintenance, repair and overhaul ("MRO") facility located in Miami, FL. TEC has been in business for over 25 years and has maintained FAA and EASA certificates since 2002. TEC provides integrity with access to certified engines and parts, facilities for engine testing, post lease engine re-certification and airline industry access.
Historically, commercial aircraft operators owned rather than leased their aircraft and engines. However, as engines have become more powerful and technically sophisticated, they have also become more expensive to acquire and maintain. Increased costs for new engines, coupled with cash constraints experienced by commercial aircraft operators, has led the industry to lease more aircraft and aircraft engines as a percentage of their aircraft fleet. The global commercial aviation market is a vast and diverse market. A subset of the global market is comprised of thousands of aero engines that are currently or are forecast to be leased, representing about $10BB in assets (Source TEAMSAI 2011). Jet aero engines have a long economic life (40+ years), and end-of-life values are typically greater than aircraft values over the life of the asset. Leasing aero engines generates consistent and predictable revenue flows and lease rates show lower volatility than aircraft rates.
The acquisition of Integrity capitalizes on the Company’s in-house engineering and project management capabilities, compliments Integrity's management and gives the Company a solid asset and revenue backed foundation on which to build. The timing of this strategic initiative dovetails to the upswing in the global airline market and industry shift to off balance sheet financing of operations and flight critical capital equipment.
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