Companies: AI.   

Aircraft parts and inventory manager Aero Inventory has signed a ten-year exclusive contract with Canada's leading aircraft repairs group.

Under the contract, Montreal-based ACTS Aero Technical Support & Services will pay AIM-quoted Aero Inventory to supply and manage a wide range of 'consumable and expendable' aircraft parts. According to New Barnet-based Aero, the contract should generate revenues of some US$1.2 billion (£600 million) at ACTS's present rate of consumption.

The agreement obliges fast-growing Aero to buy existing stock, including a copy of the Canadian group's database, from ACTS for £47.5 million, to be financed from Aero's recently enlarged bank facility with Lloyds TSB. ACTS is also to become Aero's exclusive marketing representative 'in the Americas' and, if Aero's revenues from the contract reach £125 million or more in its third year, ACTS has an option to buy two million Aero shares at 588p during the fourth, fifth or sixth year of the deal.

Aero, which increased pre-tax profits 171 per cent to £26.8 million in the year to June on turnover doubled to £127.8 million, now has 'the perfect opportunity to promote our business model to the largest market in the world', trumpets chief executive officer Rupert Lewin. Floated at 123p in 2000 and recommended by Growth Company Investor at 362p last year, the shares have now reached 725p, valuing the company at £354 million.

Hold on.

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