Private equity is closing its grip on essential business aviation assets as Apollo Funds buys a ‘significant’ stake in Atlantic Aviation.
In a deal that values FBO chain Atlantic Aviation at $10 billion, Apollo Funds has acquired a “significant interest.”
The current owner, KKR-managed funds, remains a substantial shareholder.
Atlantic Aviation has 105 FBO locations in North America, according to its website.
Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to the Apollo Funds.
Evercore and Morgan Stanley & Co. LLC served as financial advisors.
Kirkland & Ellis served as legal advisor to KKR.
KKR acquired the FBO chain in 2021.
Blackstone Global Infrastructure Partners and Bill Gates’ Cascade Investments acquired rival Signature Aviation that same year.
Of today’s news, Apollo partner David Cohen said in a press release, “Atlantic has built an irreplaceable infrastructure footprint across the nation’s busiest airports, underpinned by long-term concession agreements and a customer base that values reliability and service above all else.”
Cohen added, “The private aviation market has structural tailwinds that we believe will persist, and Atlantic is well positioned to capture that growth.”
KKR partner Dash Lane said, “Our continued support of the company reflects our conviction in both the strength of the platform and the long-term growth of the sector, and we are pleased to welcome the Apollo Funds as new investors in the company.”
Atlantic Aviation CEO Jef Foland said, “To have two of the world’s most respected investment firms choose to invest in our company is an extraordinary endorsement of our people, our performance, and our potential.”
READ: Private Aviation Deal Book – Over 200 M&A Transactions
The move was not unexpected.
But it comes as private jet operators and management companies have increasingly criticized private equity-backed FBOs for higher fees.
Special event fees, which were typically imposed only during the Super Bowl and events like the Masters, are now commonplace.
Signature and Atlantic regularly impose extra fees during regular-season NFL home games and holiday weekends, including Presidents’ Day.
Fees for large cabin jets can range over $20,000.
Flexjet Inc. Chairman Kenn Ricci has been critical of private equity.
During a conference earlier this year, asked about top concerns, he said, “Private equity.”
Ricci said the firms are “driving up costs—maintenance, FBOs, everything.”
Since 2015, KKR has invested more than $12 billion across the aviation sector.
Over the past five years, Apollo has originated more than $155 billion of infrastructure transactions and financings across energy, transportation, digital and industrial sectors.
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