Fast growing company Sycamore Aviation has been cleared for take-off after securing a development capital investment package of more than £750,000.
The company, at Durham Tees Valley Airport, was set up last year to be at the forefront of the end-of-life aircraft recycling industry – dismantling entire planes and re-using complex and expensive aircraft parts.
Within a year of its launch, the firm has reached £1m in revenues, while breaking even in profits. Now it intends to expand further after securing the six-figure package from a syndicate of investors led by regional venture capital company FW Capital, which made a £700,000 equity investment from the North East Growth Plus Fund.
The investment will fund the acquisition of aircraft for parts salvage as well as the company’s expansion into the engine “tear- down” market. The company also plans to recruit key staff and buy new equipment and systems.
Founder and managing director Kevin O’Hare said; “As airlines are expanding their fleets to take advantage of modern composite built aircraft, the number of planes being retired is growing exponentially. The traditional answer to this problem was to store the aircraft in the deserts of Arizona. Sycamore solves this problem with our ability to decommission aircraft and recycle over 90% of the parts and materials, saving airlines the costs of new parts and reducing environmental impact of the airline industry as a whole.
“This deal is an incredibly exciting step for us. The market potential is huge and we are now perfectly positioned to grab this.”
With full approval from the Environment Agency and a refurbished 45,000 sq ft hangar at the airport, the company has capacity to store up to 48 airliners and process up to five aircraft a month.
Having already processed nine Boeing 737s and Airbuses, Sycamore Aviation will now secure its EASA145 certification to enable aircraft maintenance and to develop its jet engine maintenance, storage and tear-down capabilities.
The transaction was led by Chris Appleby of BTG Corporate Finance with Ward Hadaway advising on specialist areas of aviation law.
Accountants RHK provided tax and accounting advice, with Sanderson Weatherall advising on property matters. FW Capital investment was led by Michael Vassallo with legal advice provided by Watson Burton.
Appleby said: “This North East business has shown so much early promise that FW Capital was keen to back the management to achieve its ambitious growth plans, and the deal will create dozens of new jobs locally.”