Private equity firm seeks to bail out of executive jet group for £1bn

Click to follow
The Independent Online

Permira, the private equity giant, is mulling the £1bn sale of Jet Aviation Group, its Swiss-based executive jet business.

It is understood that Permira has appointed Morgan Stanley, the investment bank, to review the business, with a sale the most likely result.

Permira bought a majority share in the company for an undisclosed fee in late 2005, but hunger for consolidation in the air-travel industry is thought to have prompted the decision to exit. An industry source said: "At £1bn, the sale is in the mid-market for private equity. You would need a fairly specialist knowledge for this sector, so it could be a trade buy."

NetJets, the private-jet operator owned by Warren Buffett, the billionaire US investor, was named by the source as a potential bidder. The listed private equity firm 3i could also be interested, having been involved in failed $500m (£250m) takeover talks nearly six years ago.

The exact price tag is unclear, but a leading industry banker said that it would probably be slightly more than £1bn.

Founded in 1967, Jet Aviation employs 5,100 people, runs its operations from 20 airports around the globe, and owns a fleet of more than 200 aircraft. Under Permira, the company has pursued a buy-and-build strategy, its purchase of US rival Midcoast Aviation in February 2006 boosting sales by one-third to more than $800m.

The strategy continued as recently as January, when Jet Aviation bought Savannah Air Center, a US-based independent maintenance company.

Permira invests in four core sectors: chemicals; consumer products; industrial products and services, to which Jet Aviation belongs; and technology, media and telecoms. Among its best-known portfolio companies are Iglo Birds Eye, the frozen-food maker bought from Unilever for £1.2bn in August 2006, and Provimi, a Dutch animal feed business in which it bought a 74 per cent stake last year.

Comments