2nd Mar 2020 19:45
(Alliance News) - Gama Aviation PLC on Monday said it has sold its US business Gama Aviation LLC to US-based aviation company Wheels Up Partners Holdings LLC for USD33 million.
Gama Aviation LLC - also known as Gama Aviation Signature - is a 49% owned by joint venture GB Aviation Holdings LLC and 51% owned by the group's US partners.
The USD33 million acquisition amount will comprise USD10 million in return for around 25% equity interest, and USD23 million for accelerated branding fees and other trading related considerations.
The aviation services firm said it will receive USD13 million of the payment in cash upon completion of the acquisition. The remaining USD20 million will be paid in cash with interest, over eight six-month instalments over the next four years.
The transaction is expected to be accretive to underlying earnings in 2020 and 2021, the company said.
Under the transaction, GB Aviation Holdings has licensed the continued use of the Gama Aviation Signature brand for up to two years. Additionally, the group has entered into a five year non-compete agreement with Wheels Up.
"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," said Gama Aviation Chief Executive Marwan Khalek.
The stock closed 3.9% lower at 49.50p each on Monday in London.
By Ife Taiwo; [email protected]
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