New York investor to take control of loss-making US fractional and diversify business
Piaggio P180 Avanti fractional-ownership provider Avantair is to be acquired and taken public in a move that will give the US company the necessary capital to grow its fleet and diversify into fixed-base operations (FBO). Privately held Avantair has seen losses mount as its fleet has grown to 25 Avantis, with 58 more on order.
The fifth-largest US fractional, Avantair’s revenues grew from $7.7 million for the fiscal year ending June 2004 to $48.4 million for FY06, split roughly equally between share sales and maintenance and management fees. But over the same period net losses rose from $5 million to more than $20.7 million.
Clearwater, Florida-based Avantair will be purchased by Ardent Acquisition, which was formed in September 2004 to invest in an operating business. The New York-based firm raised $41 million in March last year through an initial public offering. Ardent will purchase Avantair for an initial 7 million shares, and also assume or repay the fractional’s $33.6 million debt.
Based on the company’s future performance, Avatair’s stockholders would be entitled to additional payments if milestones are met. These include 1 million more shares if operating cashflow reaches $6 million in FY2007, and another 6 million if it reaches $20 million in FY2008. A further 5 million shares would be paid in 2009 if stock price targets are met. Avantair will be the only publicly traded “pure play” fractional, says Ardent.
The fractional’s management team will be kept by Ardent, which will change its name to Avantair. As well as growing the fleet, its business plan is to expand into FBOs, to diversify its revenues as well as providing strategic operating bases and reducing repositioning costs. Avantair has an FBO in Clearwater, plans to operate another in Camarillo, California by year-end, and is in talks to take over an operation in Caldwell, New Jersey.
Source: Flight International
