Wheels Up (NYSE: UP) announced today that it has reached an agreement to acquire Air Partner PLC (LSE: AIR). The acquisition increases Wheels Up’s international expansion and provides connections to international aircraft supply for the Wheels Up marketplace. It also expands the aviation services and business offerings from the company.
Air Partner
Founded in 1961, Air Partner is a global aviation services company providing private jet, group and freight charter and aviation safety & security solutions to industry, commerce, governments and private individuals, across civil and military organizations. The company is publicly listed on the London Stock Exchange (LSE: AIR), has 18 locations across four continents and opened its first US office in 1997.
Air Partner will provide Wheels Up the ability to expand its service offerings internationally, and Wheels Up expects Air Partner to leverage Wheels Up’s investments in operations, service and technology on a global basis with an active and engaged customer base. The proposed acquisition will add an experienced global team from a company with more than 60 years of continuous operations in private aviation.
“This proposed acquisition has a compelling strategic rationale, bringing together two businesses with complementary offerings and values for the benefit of their customers. I am extremely proud of Air Partner, we have built a fantastic team and a highly attractive business and Wheels Up’s offer is a clear acknowledgment of this,” said Air Partner CEO Mark Briffa. “The Air Partner Board believes that a combination with Wheels Up would give our customers, colleagues and stakeholders the additional resources of one of the largest private aviation companies in the world, enabling us to significantly enhance our technology, customer offer, and international aircraft supply. Air Partner has always placed the customer at the heart of what we do – a value that is equally shared by Wheels Up – and I am confident this will continue to be the case.”
Marketplace
Air Partner is an aircraft broker, with an “asset-light” structure, so has no owned aircraft or operating certificates, but it does have longstanding relationships with aircraft operators across the globe. The acquisition will accelerate the expansion of Wheels Up’s technology-enabled marketplace, providing immediate connection to a global network of safety vetted and verified aircraft supply.
“Today’s announcement marks an important new chapter for Wheels Up as we systematically build the leading global, private aviation company that creates unparalleled value for our customers and shareholders,” said Wheels Up Chairman and CEO Kenny Dichter. “This acquisition will allow us to offer existing and future customers even more compelling and seamless options for private travel, expand the reach of our marketplace in key markets around the world, and add important operational capabilities to our network. Air Partner has tremendous heritage, leadership expertise and unique capabilities that will allow us to accelerate our global strategy and credibly expand our offerings in a meaningful way. We look forward to sharing more details on the transaction and our go-to-market plans after the deal formally closes.”
Air Partner also provides safety training, consulting and regulatory compliance services, which could help the addition of safety-vetted and verified aircraft to the Wheels Up marketplace across all markets.
Wheels Up also says that the relationships with international operators can extend adoption and penetration of Wheels Up’s Flight Management System in North America and beyond.
Financially
Wheels Up became a public company in 2021 through a SPAC deal, and this gave it several hundred million dollars of cash on its balance sheet. Prior to this it had done multiple acquisitions (eg Delta Private Jets, Gama Aviation Signature) over the last few years. The Delta Private Jets deal is the most comparable prior acquisition, because like Air Partner, Delta had a charter and jet card client base which have been moved to the Wheels Up platform.
In this current acquisition, Wheels Up will acquire the entire issued and to be issued ordinary share capital of Air Partner for 125 pence per share, equivalent to an enterprise value of approximately $107 million. The acquisition is expected to close later in the first quarter subject to shareholder and regulatory approvals.
Wheels Up says it expects the integration of Air Partner’s historically profitable business to be accretive to Wheels Up’s contribution margin and adjusted EBITDA in the first year of acquisition.