Private jet service Flexjet is going public in a Spac deal with Chelsea Football Club’s relatively new owner Todd Boehly, the US financier.
The main rival to Warren Buffett-backed NetJets confirmed it would merge with Boehly's Horizon Acquisition Corporation II to list on the New York Stock Exchange.
Ohio-based Flexjet, which offers fractional ownership of planes and jet cards, is expected to rake in US$2.3bn in sales this year – over a third higher than in 2021, the Financial Times reported.
“Our strong revenue performance has been driven by sustained growth in our fleet size and customer base,” Mike Rossi, Flexjet's chief financial officer, commented.
Flexjet demand was so high at one point last year that it closed its jet card programme – a pre-paid balance of flight hours – to new customers, as private aviation boomed, the FT said.
The company’s chairman, Kenneth Ricci, insisted the deal, which implies a pro forma enterprise value of US$3.1bn, “will position us to expand market share at an accelerated pace in an opportunistic environment”.
Flexjet's net fiscal 2021 income was just under US$53mln following US$1.7bn in sales.
Spending by American companies on executives’ personal use of private jets surged 35% last year, the FT said.
Special purpose acquisition companies (Spacs) are publicly traded vehicles, which raise cash to buy a private company. They became one of the most popular investments in late 2020 and early 2021 but have plummeted since investors chose to avoid riskier businesses.
Investors in Spac-backed companies have lost more than US$250bn since 2020, according to Spac Research.
Boehly, who also co-owns the Los Angeles Dodgers baseball side and the LA Lakers basketball team, co-founded Eldridge Industries, an investment group that operates across various sectors. Before that, he was president of Guggenheim Partners.
The Los Angeles-based investor, who is a massive backer of blank-cheque companies, used Horizon Acquisition I in 2020 to buy digital ticketing business Vivid Seats, which is now trading around 20% lower than its IPO value.