The transaction values Wheels Up at an enterprise value of $2.1 billion and is expected to provide up to $790 million in cash proceeds when it closes in Q2
SPAC CEO Shakran sees “[M]any opportunities to leverage our experience and relationships to partner (Wheels Up) with other aspirational and luxury brands and to expand to international markets”
Following its acquisition spree, Wheels Up has the world’s second-largest for-hire fleet of private aircraft, behind only NetJets
Sometimes rumors do come true. As Reuters reported last week, Wheels Up Partners Holdings LLC this morning said it has entered into a definitive agreement to become publicly-traded via a merger with special purpose acquisition company, Aspirational Consumer Lifestyle Corp. (“Aspirational”) (NYSE: ASPL).
The transaction values Wheels Up at an enterprise value of $2.1 billion, per the announcement. The deal is expected to provide up to $790 million in cash proceeds, including a $550 million PIPE and up to $240 million of cash held in the trust account of Aspirational Consumer Lifestyle Corp.
Upon the consummation of the merger, the parent will be renamed Wheels Up Experience Inc.
A 2020 analysis by Private Jet Card Comparisons ranked Wheels Up as the second-largest operator of for-hire private aircraft in the U.S., trailing only NetJets.
Aspirational was formed and is led by a partnership of experienced consumer investors, including its CEO Ravi Thakran. The private equity veteran is a former Group Chairman of LVMH Asia.
LVMH-backed L Catterton, the large, global consumer-focused private equity firm, is a minority shareholder. LVMH includes over 60 luxury brands, including Louis Vuitton, Dior, Hublot, and Tag Heuer, and more recently Belmond’s luxury hotels and trains. LVMH has wanted to diversify beyond hard luxury into experiential luxury.
Upon closing of the transaction, Wheels Up will be the first private aviation platform to be listed on the New York Stock Exchange (NYSE: UP).
Wheels Up Founder and CEO Kenny Dichter tells Private Jet Card Comparisons, “This is just the beginning.”
In addition to continuing growth in the U.S. private aviation sector, the deal greases the skids for Wheels Up to expand internationally and adjacencies of interest to its affluent members. At a conference last fall, Dichter told attendees he saw opportunities in both the yacht charter and villa rental market as well as timepieces.
Thakran told CNBC Squawk Box, “I’ve seen the overlap between luxury brands and private jet customers is almost complete, be it from fashion, beauty, jewelry, champagne.”
The company has long since attempted to expand its reach, including selling memberships through Costco. It has also made its mark with a host of high-profile celebrity ambassadors, including future Hall of Fame quarter Tom Brady, who will be playing for his seventh Super Bowl title against the Kansas City Chiefs this Sunday.
The Company’s current management team will continue. Thakran will join the combined company’s Board of Directors upon completion of the transaction. In recent months Wheels Up has been active in bolstering its C-Suite, hiring executives top legal, HR, marketing, and operations executives from Hilton, eBay, Adobe, and Patron.
“When we founded Aspirational, Wheels Up was exactly the kind of company we wanted to partner with. Kenny and his world-class team have created a truly iconic brand built upon years of exceptional, personalized customer experiences. They are a clear leader and innovator in the space and we look forward to working together to introduce Wheels Up to the global stage. We see many opportunities to leverage our experience and relationships to partner with other aspirational and luxury brands and to expand to international markets,” Thakran said.
Dichter added, ““We are excited about crossing this milestone and our new partnership with Aspirational. We believe this will allow us to actualize our founding goal of democratizing private aviation, through our unique membership model, suite of products and benefits, and by bringing the shared economy to private aviation through our Wheels Up app. We are looking forward to joining forces with the Aspirational team as we continue to accelerate our global growth and expansion.”
Wheels Up SPAC to deliver up to $790 million of gross proceeds
The transaction is expected to deliver up to $790 million of gross proceeds to the combined company, including the contribution of up to $240 million of cash held in Aspirational’s trust account from its initial public offering in September 2020.
The combination is further supported by a $550 million PIPE at $10.00 per share, including commitments from T. Rowe Price, Fidelity, Franklin Advisors, Durable Capital, HG Vora Capital Management, Third Point, Luxor Capital, and Monashee, among others.
Existing Wheels Up shareholders will roll 100 percent of their equity into the new company. Upon completion of the transaction, Wheels Up expects to have up to $750 million in cash on its balance sheet to fund operations and support new and existing business initiatives.
The transaction, which has been unanimously approved by Aspirational’s Board of Directors and the independent directors of Wheels Up’s Board of Directors, is expected to close in the second quarter of 2021. It is subject to Aspirational and Wheels Up’s shareholders’ approval and other customary closing conditions, including any applicable regulatory approvals.
Wheels Up and Delta Air Lines
Delta Air Lines continues as a significant minority investor. It obtained that stake last year when it merged its Delta Private Jets into Wheels Up. It was among a host of acquisitions of private jet charter operators, the most recent coming last month with Mountain Air.
Delta’s investments in Air France, Korean Air, Aeromexico and other international airlines could serve as a based for Wheels Up to expand beyond its current U.S. footprint of members. Korean Air already operates a private jet fleet while both Aeromexico and Air France have had past alliances with private jet operators.
The deal happens as private aviation enjoys some of the strongest tailwinds in the COVID-19 battered travel industry. A recent survey of new private jet users shows 96% plan to continue flying privately after the pandemic.
You can read the SEC filings here.