Earlier this morning Thomas Flohr’s VistaJet announced it had reached an agreement to acquire XOJET via Vista Global, a Dubai based holding company formed earlier this month. The deal covers XOJET’s business aviation fleet and commercial operations, and the release said XOJET’s regulated air carrier will continue to be independently operated in a joint venture under U.S. control and leadership, in accordance with U.S. Department of Transportation criteria. As first reported by Private Jet Card Comparisons, earlier this year XOJET hired Perella Weinberg Partners to explore its ongoing business options.
The deal expands both companies in several key ways: First, VistaJet gets a bigger share in the world’s largest business aviation market, the U.S. At the same time, XOJET’s over 40 Bombardier Challenger 300 and Cessna Citation X super-midsize jets provide additional balance away from its long-haul Global Express fleet. It also brings to Flohr one of the fastest growing private jet charter brokerages. For XOJET which earlier this year introduced light and midsize cabin jet card programs to its super-midsize offerings, VistaJet gives it a large cabin, ultra long-haul solution. Combined, the operated fleet is approximately 120 super midsize and large-cabin jets.
It’s the second acquisition by a major player this month following Ken Ricci’s Directional Aviation adding charter broker PrivateFly to its stable that includes Flexjet, Sentient Jet, and Skyjet. That deal brought more than a dozen local language websites. It also follows a significant investment by JetBlue and Qatar Airways into JetSuite in April. Today’s deal by Vista Global signals that there is plenty of appetites to consolidate the fragmented market and challenge industry behemoth NetJets which in addition to selling fractional shares, leases and jet cards offers aircraft management and on-demand charter through Executive Jet Managment. Corporate Jet Invested reported ARGUS statistics showing “XOJET flew 46,739 flight hours in the first six months of 2018. GAMA Aviation (which operates for itself and for Wheels Up) flew 72,885 hours followed by Executive Jet Management with 58,305 hours.”
In addition to selling time on its operated fleet, XOJET has built a charter brokerage that exceeds $100 million in sales using a closed network of third-party operators. Its current light jet program operates east of the Mississippi and the midsize jet card program provides guaranteed availability and fixed one-way rates east of the Rockies. XOJET jet card programs begin at $50,000 while VistaJets jet card offering starts at 50 hours. VistaJet offers a no-ferry fee global card program which it says covers 96% of the world.
According to the press statement, Vista Global said, “XOJET’s four distinct membership programs serve the whole spectrum of business aviation needs on its owned fleet, whilst also providing its customers with additional flexible off-fleet alternatives. All of XOJET’s products are asset lite, a business model which is fully aligned with prevailing global macro trends and preferred by both corporates and UHNWIs.”
It continued, “With a fleet of 43 branded super-midsize business jets, XOJET has performed strongly in recent years. In the first half of 2018, the company saw its total revenue rise by 12%, while the off-fleet business grew 22% in revenue.”
Vista Global called the deal “a major strategic step forward for Vista Global, allowing the group to build on its existing global offering and to reinforce its already established position in North America, the largest business aviation market in the world.” Vista Global said XOJET’s fleet and commercial offerings except for its U.S. controlled air carrier will join Vista Global calling it “the world’s most comprehensive business aviation group.”
After the deal closes Vista Global will have over 1,500 employees in 20 offices worldwide. Vista Global said it is building on four pillars: Guaranteed aircraft availability on its fleets, providing asset lite solutions to fly point to point anywhere, anytime; on-demand global flight coverage; worldwide aircraft leasing and financing service; and the most cutting-edge technology to support aviation companies’ customer services.
Vista Global’s Founder and Chairman Thomas Flohr said: “The journey started when I first saw an opportunity in the fragmented and inconsistent offering across the industry. Vista Global’s mission is to provide customer-centric solutions for every segment of business aviation and today’s announcement is a major step in that direction. This acquisition is the perfect addition to our global business. XOJET’s strength in North America and its reputation for offering great value perfectly complement VistaJet and the other businesses in the group.”
Bradley Stewart, Chairman & Chief Executive Officer of XOJET, said: “I am incredibly proud to be making today’s announcement, which will see our company become part of a fantastic family of brands. Becoming part of Vista Global will enable XOJET to achieve our dream of becoming a truly global business, providing us with the very best technology and infrastructure. I believe that Vista Global and XOJET are fundamentally aligned in our commitment to serving clients. I am looking forward to working with the Vista Global team and its companies in the future.”
According to the release, the completion of the transaction is subject to customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. There is no financing condition to the transaction. The transaction is currently expected to close in the fourth quarter of 2018. XOJET’s regulated air carrier will be operated in a joint venture under U.S. control and leadership, in accordance with U.S. Department of Transportation criteria.
Jefferies LLC is serving as the exclusive financial advisor and Latham & Watkins LLP as the principal legal advisor to Vista Global. Perella Weinberg Partners is acting as the exclusive financial advisor to Mubadala Investment Company and White & Case LLP is serving as the principal legal advisor to Mubadala. Acquisition financing with non-recourse to the other three Vista Global businesses has been provided under the lead of J.P. Morgan, with Jefferies LLC.