Following its acquisition last fall of XOJET, Rhone Capital backed Vista Global said it has entered into an agreement to acquire Ft. Lauderdale-base JetSmarter with the goal of creating a global on-demand digital marketplace.
The move comes as JetSmarter is trying to minimize its legal liabilities via a pending class action arbitration settlement. It is also facing at least a dozen lawsuits as the result of its changing its business model from an all you can fly annual membership to charging members often several thousands of dollars for a single seat.
The announcement makes no mention of JetSmarter’s troubles. Instead, it focuses on its leadership in creating a digital on-demand private jet charter marketplace, something we covered very recently.
Vista Global’s founder and chairman Thomas Flohr said, “Today’s acquisition is an important milestone for Vista Global – accelerating and executing our vision of digitizing the entire private aviation offering. Customers today want speed, reliability and value, which in today’s world is only possible with technology. Vista Global’s reach and infrastructure will take JetSmarter to the global stage to fully realize its potential. JetSmarter’s technology will digitalize Vista Global’s market-leading customer offering to Program Members and On Demand customers.”
Last fall, Cleveland-based Directional Aviation which operates the second largest fleet of private jets in the world behind Berkshire Hathaway’s NetJets snapped up U.K.-based online charter broker PrivateFly to expand its digital presence. PrivateFly operates over a dozen local language websites in close to 20 countries. Directional owns Flexjet and Sentient Jet, leaders in fractional ownership and jet cards. Just this week it merged its Skyjet charter broker brand into PrivateFly.
Behdad Eghbali, Managing Partner and Co-Founder of Clearlake Capital Group, an investor in JetSmarter said, “Vista Global’s worldwide fleet access, unmatched end-to-end service experience, and world-class management team will combine with JetSmarter’s digital technology leadership including digital bookings and on-demand crowdsourcing to further expand Vista Global’s leadership.”
He continued “We are thrilled to partner with Thomas Flohr and the talented management team at Vista Global and believe that, combined with Vista Global, JetSmarter will flourish and revolutionize the industry’s digital transformation.”
According to a press release, the transaction is expected to be completed in the second quarter, subject to customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
As part of the transaction, all JetSmarter investors, inclusive of Clearlake Capital and Jefferies Financial Group, will become investors in Vista Global, supporting its future growth. Jefferies LLC acted as financial advisor to JetSmarter.
There is no indication of what role if any Sergey Petrossov, the founder of JetSmarter, who has been at the center of its recent problems, will play.
For Flohr and Vista Global as well as XOJET, which both have strong reputations for customer relationships, they now may also have to figure out how to handle JetSmarter’s legal and brand image challenges.
JetSmarter will be incorporated within Vista Global’s TechX and into back-end technology of VistaJet, Vista Lease and XOJET.
Flohr said JetSmarter will continue to operate from its Ft. Lauderdale base where its digital team is located.
As part of the transaction, all JetSmarter investors, inclusive of Clearlake Capital and Jefferies Financial Group, will become investors in Vista Global, according to a press release. Terms of the deal were not announced.
Earlier this year Wheels Up announced it had hired Bank of America and Goldman Sachs to explore strategic options. Its founder Kenny Dichter has also tabbed digital expansion as a major focus.