Signature Aviation, which operates Signature Flight Support—the world’s largest FBO chain—could soon be under new ownership with news that the UK-based company has accepted a cash deal worth more than $4.63 billion from Global Infrastructure Partners (GIP). This comes as a bidding war involving other investment firms such as The Carlyle Group, which previously owned the former Landmark Aviation FBO chain, began to heat up.
Last month private equity group Blackstone Infrastructure Advisors and Blackstone Core Equity Management Associates presented Signature an offer for $4 billion and over the weekend came word that Cascade Investment—which manages a large portion of Microsoft founder Bill Gates’s personal fortune and a nearly 20 percent stake in Signature—joined with Blackstone to strengthen its bid. Signature’s share price has more than doubled since December when the word of the possible sale of the company that has more than 200 locations worldwide began to leak.
This morning, however, Signature announced to shareholders that its board of directors has reached an agreement with GIP, which had improved on the amount of a previously-issued bid, on the terms of a recommended cash acquisition. GIP currently manages $71 billion in assets and the Signature purchase will be handled under Bidco, a recently-established Delaware limited-liability company. Included are the FBO chain and its Epic Fuels subsidiary, as well as the company's engine repair business that it has been attempting to unload. “Signature has identified the engine repair and overhaul business as non-core and has an ongoing process to pursue the divestment of this business. Bidco is supportive of this initiative,” the company said.
The deal is subject to legal review and the approval of at least 75 percent of Signature's shareholders.
“We believe that the offer from GIP represents an attractive and certain value in cash today for Signature shareholders, reflecting the high quality of the business and its network, its people, and its future prospects,” said Signature chairman Sir Nigel Rudd. “The Signature directors believe that the proposal provides clear benefits to Signature shareholders and GIP’s operational and financial resources will generate enhanced opportunities for our employees, and ensure continued high-quality, full-service flight support for [business and general aviation] travel.”