The private aviation company has announced a business combination agreement with Horizon Acquisition Corporation, a publicly traded special purpose acquisition company
The transaction values the combined company at a pro forma enterprise value of $3.1 billion, representing 10.8x projected 2022 Adjusted Management EBITDA of approximately $288 million. The transaction is backstopped with an up to $300 million common equity capital commitment from Eldridge Industries (an affiliate of Horizon’s sponsor) and Horizon’s sponsor, which consists of $155 million in non-redemption agreements and an up to $145 million redemption back-stop.
Flexjet’s subscription base consists primarily of ultra-high-net-worth individuals and Fortune 500 corporations through approximately 10,000 committed contracts. Over 35% of Flexjet’s fractional customers have been with it for more than 10 years and 55% have been with it for more than five years. Flexjet offers fractional jet ownership and leasing, jet cards, on-demand charter programs, and full aircraft ownership.
“Having capital and currency will position us to expand market share at an accelerated pace in an opportunistic environment,” said Kenneth Ricci, chairman of Flexjet, adding “We will parlay our existing profitability and use that as a launch pad to accelerate our growth into the next chapter. We are making this decision at a time when we believe the marketplace is expanding at a more aggressive rate.”
With 250 aircraft and helicopters and a global aviation infrastructure network, Flexjet provide a pilot operating model referred to as dedicated crewing. Pilots are assigned to one specific airplane N-number for familiarity and ease of use. The company’s global reach consists of 3,100 employees, including 1,000 non-union pilots and 450 licensed maintenance technicians across nine office locations in the United States, United Kingdom, and Italy.
“We believe this transaction provides Flexjet with ample capital to execute Flexjet’s long-term vision, the ability to continue to serve its loyal customer base, and positions the Company for success in the public markets,” said Todd Boehly, CEO, CFO and chairman of Horizon.
The boards of directors for both Flexjet and Horizon have approved the proposed business combination, which is expected to be completed in the second quarter of 2023, subject to shareholder approvals and other customary closing conditions, as well as successful completion of the pending solicitation of shareholders to extend Horizon’s period to complete a business combination transaction.