The leading rival to the Warren Buffett-backed NetJets is planning to go public in a Spac deal led by Todd Boehly, the US financier who owns the Chelsea football and Los Angeles Dodgers baseball clubs.
Flexjet said it would merge with Horizon Acquisition Corporation II to publicly list on the New York Stock Exchange. The Cleveland, Ohio-based company, which offers both fractional ownership of aeroplanes and jet cards, is projected to bring in $2.3bn in revenue this year — more than a third higher than in 2021 — as private aviation booms.
Flexjet chair Kenneth Ricci said the deal, which implies a pro-forma enterprise value for the company of $3.1bn, “will position us to expand market share at an accelerated pace in an opportunistic environment”. The transaction is expected to close next year.
Spending by US companies on executives’ personal use of private jets rose 35 per cent last year. The market is expected to grow over the next four years at a compound annual rate in the high-single digits.
Demand at Flexjet was so hot at one point in 2021 that the company closed its jet card programme — a pre-paid balance of flight hours — to new customers. The company reported net income in fiscal 2021 of just under $53mn on $1.7bn in revenue.
“Our strong revenue performance has been driven by sustained growth in our fleet size and customer base,” chief financial officer Mike Rossi said.
Boehly, who acquired Chelsea in a £4.25bn deal this year, is a serial backer of blank cheque companies. The Los Angeles-based investor used Horizon Acquisition I in 2020 to buy digital ticketing business Vivid Seats, which is trading about 20 per cent below its initial public offering value and earlier this year he withdrew Horizon Acquisition III, which was launched in 2021.
The publicly traded vehicles, which raise cash with the intent to buy a private company, became one of the most popular investment plays in late 2020 and early 2021 but have since plunged as investors have opted to stay away from riskier businesses. Investors in Spac-backed companies have lost more than $250bn since 2020, according to Spac Research.
Boehly, who also co-owns the Los Angeles Dodgers, and the LA Lakers basketball team, is the co-founder of Eldridge Industries, an investment group that operates across sectors, including insurance, media and real estate. Before that he was president of Guggenheim Partners.
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