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Friday, May 27, 2022

Wheels Up, one of the largest private aviation companies is buying international aviation services group Air Partner. Both companies offer memberships or jet cards, which provide access to private aircraft at fixed hourly rates. Both are also among the few private aviation companies that are publicly listed.

Under the terms of the transaction, Wheels Up (NYSE: UP) will acquire the entire issued and to be issued ordinary share capital of Air Partner (LSE: AIR) for 125 pence per share, equivalent to an enterprise value of approximately $107 million. The acquisition is expected to close later in the first quarter of 2022 subject to shareholder and regulatory approvals.

Air Partner Background

Founded in 1961, Air Partner is a global aviation services company providing private jet, including jet cards, group and freight charter, and aviation safety & security solutions to industry, commerce, governments and private individuals, across civil and military organizations.
An acquisition of Air Partner immediately extends Wheels Up’s international reach with 18 locations across four continents, and Wheels Up expects Air Partner to leverage Wheels Up’s investments in operations, service and technology on a global basis.

Air Partner is a broker and has longstanding relationships with aircraft operators across the globe. These Air Partner relationships will accelerate the expansion of the Wheels Up marketplace, providing connections to a global network of safety vetted and verified aircraft supply. This so called “asset-light” structure, with no owned aircraft or operating certificates, allows Wheels Up to quickly scale its international footprint and with limited capital investment.

“Today’s announcement marks an important new chapter for Wheels Up as we systematically build the leading global, private aviation company that creates unparalleled value for our customers and shareholders,” said Wheels Up Chairman and CEO Kenny Dichter. “This acquisition will allow us to offer existing and future customers even more compelling and seamless options for private travel, expand the reach of our marketplace in key markets around the world, and add important operational capabilities to our network. Air Partner has tremendous heritage, leadership expertise and unique capabilities that will allow us to accelerate our global strategy and credibly expand our offerings in a meaningful way. We look forward to sharing more details on the transaction and our go-to-market plans after the deal formally closes.”

“This proposed acquisition has a compelling strategic rationale, bringing together two businesses with complementary offerings and values for the benefit of their customers. I am extremely proud of Air Partner, we have built a fantastic team and a highly attractive business and Wheels Up’s offer is a clear acknowledgment of this,” said Air Partner CEO Mark Briffa. “The Air Partner Board believes that a combination with Wheels Up would give our customers, colleagues and stakeholders the additional resources of one of the largest private aviation companies in the world, enabling us to significantly enhance our technology, customer offer, and international aircraft supply. Air Partner has always placed the customer at the heart of what we do – a value that is equally shared by Wheels Up – and I am confident this will continue to be the case.”

Wheels Up expects the integration of Air Partner’s historically profitable business to be accretive to Wheels Up’s contribution margin and adjusted EBITDA in the first year of acquisition.

Wheels Up has completed a whole series of acquisitions over the last few years. The only other jet card company it acquired was Delta Private Jets in 2019, and the Delta jet card holders have been moved into the Wheels Up membership platform.

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