11th Oct 2006 07:01
Air Partner PLC11 October 2006 Air Partner PLC ("Air Partner" or "the Group") Acquisition of licenced private jet operator Gold Air International Limited Air Partner, the world's leading air charter broker, today announces theacquisition of the entire issued share capital in Gold Air International Limited("Gold Air") from Shed Group Limited ("Shed"), a subsidiary of Gold GroupLimited ("Gold Group"). The acquisition is immediately earnings enhancing andin line with Air Partner's stated strategy to further diversify its revenuestream and invest in jet aviation services. Details of the acquisition * Acquisition of the entire issued share capital in Gold Air. * Total consideration of £4.4 million in cash. * This transaction combines Air Partner, the world's leading air charter broker, and Gold Air, a major licensed UK operator and manager of private jets, to create a business that uniquely offers a full range of world class, branded private jet services. * Gold Air does not own private jets, but receives fees for managing and operating them on behalf of clients. Gold Air is a profitable business with annual sales of £10.8m in the year to 30 June 2006. * Under the terms of the transaction, Gold Air's managed fleet will be controlled by Air Partner and available to its current and future client base. * Privately owned Gold Air is based at Biggin Hill, London. Biggin Hill is London's last remaining non-slot regulated airport. * The acquisition will be immediately earnings enhancing and offers the prospect of cross-selling opportunities. * Additionally today, Air Partner has also announced record preliminary results with turnover of £140.4m and profit before tax of £5.13m; a full announcement is available on RNS. A presentation will be held at the London Stock Exchange, 10 Paternoster Square, London, EC4M 7LS at 09:30am, to attend please contact Luxtal on T.0207 936 9790. Rationale for the transaction The European private jet market is complex and highly fragmented, comprisingapproximately 250 operating companies and brokers, and six fractional ownershipand jet card schemes. There is little consolidation within these three areas andfew companies with strong brand awareness or client traction. The combinationof Air Partner, the world's leading air charter broker, and Gold Air, a major UKoperator and manager of private jets, will create a significant businessuniquely positioned to offer a full range of world class, branded private jetservices, encompassing charter services, JetCard sales, block hours contracts,aircraft management services and private jet purchases. Post the acquisition Air Partner will control a state-of-the-art managed fleetof private jets and Gold Air becomes part of a global business with access to asignificant and established client base of private jet users. Air Partner, which was established over 45 years ago, today has 20 offices in 12countries spanning Europe, North America, the Middle East and Asia. On average,the Group flies some 17 million miles per year on behalf of its diverse clients,which vary from governments to the expanding class of high net worth individualsusing jets-for-leisure. Under the terms of the transaction, Gold Air's fleetwill be controlled by Air Partner and available to Air Partner's current andfuture clients. Gold Air's private jet owners will benefit from increasedrevenues, derived from Air Partner's global client base. In addition, theacquisition will enable satisfied ad hoc charter and JetCard clients, wishing topurchase jet aircraft, to do so within the Air Partner Group. Information on Gold Air The privately owned Gold Air is a leading London-based operator and manager ofprivate jets. Gold Air, does not own aircraft, but receives fees for operating,managing and leasing jets on behalf of its clients. Gold Air has gross assets of£5.2m as at 30 June 2006, however the gross assets figure shown in thecompletion accounts will be reduced due to the exclusion of aircraft and variousinter-company balances. In the 12 months to 30th June 2006, Gold Air had salesof £10.8 million, with EBIT of £506,000 and profit before tax of £296,000. Gold Air's managed aircraft are the United Kingdom's newest fleet of privatejets, consisting of six Lear 45s and one Hawker 800. The managed fleet ismaintained by its own highly-trained engineers at its Bombardier approvedLearjet service centre at Biggin Hill. Biggin Hill is London's last remainingnon-slot regulated airport, allowing increased travel flexibility for its users. Consideration The purchase price is total cash consideration of £4.4m based on a cash free,debt free basis, satisfied with existing cash resources. Under the terms of thetransaction Air Partner will discharge Gold Air's current £3m debt with Nat WestBank, and pay £1.4m to Shed. There will also be an additional payment to theextent that Gold Air's net assets at 30 September 2006 exceed £600,000,excluding bank debt. The net asset position is to be determined by the parties drawing up andagreeing completion accounts immediately following completion. Payment for thenet assets is likely to be around £940,000 and this sum is to be placed into ajoint escrow account at completion pending settlement of the completionaccounts. At completion, Gold Air will enter new management contracts with Gold Group forthree Lear 45 aircraft and one Hawker 125 for between two and four years and AirPartner will gain control of this managed fleet. In addition, three other Lear45's are managed for third party owners. Air Partner will be given standard commercial and taxation warranties, a taxcovenant, and non-compete type protection from Gold Group, at levelscommensurate with a transaction of this nature and value. Key individuals On completion, all Gold Air directors will resign with immediate effect, apartfrom Will Curtis (Managing Director, Gold Air) and Richard Davies (OperationsDirector, Gold Air), who will sign new Air Partner standard employment contractsin those same roles. Gold Air will be directly managed by David Savile, ChiefExecutive of Air Partner, Steph White, Finance Director of Air Partner andJustin Barber, currently a director of Air Partner's UK business. Mr. Barberwill become Commercial Director of Gold Air. Commenting on the announcement, David Savile CEO of Air Partner, said: "Theacquisition of Gold Air creates a unique business offering a full suite ofprivate jet services: ad hoc charter, JetCards, block hours contracts, jetmanagement and private jet sales. This transaction is earnings enhancing fromday one and I am confident that it provides Air Partner with significant newopportunities to increase revenues and profitability across the Group." 11th October 2006 ENQUIRIES: Air Partner PLC Tel: 01293 844805 David Savile, CEO Oriel Securities Tel: 0207 710 7600 Simon BraggNatalie Fortescue Luxtal Tel: 0207 936 9790 Tom Allison Tel: 0778 999 8020 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AIR.L