Gama Aviation sells its US Air associate to Wheels Up
Gama Aviation, the global business aviation service provider, has announced the sale of its US Air associate, Gama Aviation LLC (trading as 'Gama Aviation Signature') to Wheels Up Partners Holdings LLC.
Gama Aviation Signature is owned 49% by GB Aviation Holdings LLC, a joint venture between the Group and Signature Aviation Plc, with the remaining 51% held by the Group's US partners.
Gama Aviation will receive consideration of $33m, comprising $10m in return for its 24.5% equity interest and $23m for accelerated branding fees and other trading related considerations. $13m of the total purchase consideration is to be paid in cash at closing, with the remaining $20m to be paid in cash, with interest, in eight equal six-month installments over the next four years. The transaction is expected to be accretive to underlying earnings to FY2020 and FY2021 as well as resulting in a one-off profit on disposal of the equity interest.
As part of the transaction, GB Aviation Holdings LLC has licensed the continued use of the Gama Aviation Signature brand for up to two years. The Group has additionally entered into a five year non-compete agreement with Wheels Up in respect of its FAA Part 135 charter operations in the USA.
The Group intends to use the proceeds from the sale to continue to execute its strategic objectives through its organic and acquisitive growth investments, further consolidating the fragmented business aviation market.
Commenting on the transaction, Marwan Khalek, Chief Executive of Gama Aviation said: "We are pleased to announce the sale of our US Air associate. Strategically divesting minority investments simplifies our corporate and financial structure allowing us to further reinvest in growing the Group's wholly owned subsidiaries in line with our strategic objectives."
BlueSky Business Aviation News | 5th March 2020 | Issue #547