Flexjet, Sentient Jet, FXAir, and PrivateFly parent Flexjet, Inc., is ending its planned IPO via SPAC merger and will remain privately held.
Directional’s Flexjet, Inc. said it has agreed to terminate its previously announced business combination agreement with Horizon Acquisition Corporation II, a publicly traded special purpose acquisition company, or SPAC.
The merger would have resulted in Flexjet, Inc. becoming a publicly listed company.
As a result of the termination, the group will remain a private company.
“Because we have been dedicated stewards of our capital, there will be no impact on the growth initiatives we have launched during the past several years, which remain full steam ahead,” said Flexjet Chairman Kenn Ricci.
He added, “We believe that the decision to terminate at this time is in the best interests of our aircraft owners, employees, and other stakeholders.”
Todd Boehly, Chairman and CEO of Eldridge and Chairman, CEO, and CFO of Horizon, said, “We have enjoyed and will continue our long partnership with Flexjet’s management team and respect their decision. We are glad that Flexjet and Horizon were able to agree to the termination in a manner that is fair.”
In a message to Flexjet fractional owners, Flexjet CEO Mike Silvestro wrote, “During this process, it became evident to us that being a public company would result in significant outside influence by many who were not well-versed in our culture and who did not understand the passion that we share for the business.”
He added, “This lack of alignment was becoming a detriment to what makes Flexjet authentic, appealing, and genuine. The culture that we have built at Flexjet is not just a nice-to-have, it is the foundation of our business.”
Sllvestro further noted, “The risk that our most critical differentiator was in jeopardy, along with a less-than-favorable outlook in the equity markets, gave us serious pause”
According to the announcement, “Flexjet will remain opportunistic with respect to all capital markets and available opportunities moving forward.”
Ricci said, “Flexjet and our other branded storefronts (Sentient Jet, FXAir, and PrivateFly) are highly sought-after and trusted brands with 40 years of history in the aviation sector. In 2022, we outperformed the financial targets provided at the start of the SPAC transaction and continue to deliver significant cash flows and compelling year-over-year growth. Our position of strength gives us the flexibility to access the public markets at the appropriate time.”
The release said Flexjet is expected to add 37 to its fleet in 2023, bringing the total to more than 270 aircraft, excluding helicopters, by year-end.
By the end of 2023, Flexjet will have added nearly 88 aircraft since Q1 2021.
A new state-of-the-art Cleveland headquarters is expected to open this year as well.
The company said it is considering acquisitions, as well.
Hiring across the organization, including the planned hiring of 388 additional flight crews and 338 aircraft maintenance technicians this year, continues. In total, Flexjet is expected to hire an additional 1,400 employees.
“Changing course mid-stream is not the easiest path, but I have always respected our team for having the discipline to do just that,” added Ricci.
He further noted, “We will remain nimble and alter course if necessary to ensure we are always doing what is truly in the best interest of our business. Nobody is better positioned to meet the needs of an expanding global private aviation market as is Flexjet.”
In an investor presentation, the group reported revenues of $1.71 billion in 2021, projected to rise to nearly $3 billion in 2022.
The company reported Adjusted Management EBITDA profits of $184 million in 2021 and had forecast profits of $288 million last year.
(Updated @ 10:25 PM on April 11, 2023: Horizon will receive a $30 million termination payment, according to an SEC filing.)
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