The XOJET acquisition by Vista Global is a done deal, although Bloomberg reports its financing faced several hiccups on the way
Dubai-based Vista Global’s September announcement that it had reached an agreement to acquire XOJET has closed and has landed safely, but a report by Bloomberg suggests that some of the financings were hit by market turbulence. The acquisition dramatically increases Vista Global’s penetration of the U.S. business aviation market, the largest in the world. It has also said it plans to expand the XOJET brand globally from its U.S. base. The two entities combined operate approximately 115 super midsize and large cabin extended range jets, while XOJET brings a charter brokerage arm that contributes over $100 million in sales.
Officials from VistaJet declined to comment on the Bloomberg report but confirmed to Private Jet Card Comparisons that the Vista Global acquisition recently closed. No official announcement had been issued.
The Bloomberg report headline, which was part of its paid subscription service, but was reviewed by Private Jet Card Comparisons, was titled, “JPMorgan unloads jet loan at steep discount as investors resist.” It noted that the bank had committed to fund the acquisition so it was on the hook regardless. It said VistaJet had originally sought $280 million, but the final loan amount ended up at $210 million. It noted pricing of the loan ending up dropping to a discount of 93 cents on the dollar “from initial talk of 99.5 cents.” A partial version of the article is available here.
Bloomberg reported, “XOJET’s challenging syndication process comes at a time when anything-goes dynamics in the loan market are showing signs of turning. After two years of borrowers having the upper hand, some choppiness amid uncertainty has given investors leverage to push back on lending terms. Loans are being sold at larger discounts than they have in months and investors are worried that a global recession over the next couple of years will hurt consumer demand, including for luxury services such as private jets.”
In terms of going forward, neither XOJET or VistaJet offer escrow programs for jet card members, however, XOJET program deposits are refundable and VistaJet programs offer flexible payment schedules so members don’t necessarily have to prepay for their entire yearly flight hours in advance.
In August of 2017, VistaJet said Rhone Capital had made a $150 million investment in the company valuing the aviation provider at $2.5 billion. Before announcing his acquisition of XOJET, VistaJet founder and chairman Thomas Flohr had formed a holding company based in Dubai trading as Vista Global. In making that announcement, the company said the move was “endorsed by (a) further $200 million investment from global private equity firm Rhône Group.”
Recently, VistaJet announced a worldwide program featuring fine wines and creating live inflight family programming. XOJET meanwhile has been busy adding luxury lifestyle partners. XOJET card programs begin at $50,000 while VistaJet starts at 50 hours per year. Earlier this year XOJET made news when it launched off-fleet midsize and light jet card programs. As we reported last week, Wheels Up confirmed it will also offer an off-fleet fixed rate light jet program after previously only selling fixed rate programs on its own fleet.