Flexjet, a private aviation company whose branded storefronts include Sentient Jet, FXAir and PrivateFly under the Directional Aviation family, has announced a definitive business combination agreement with Horizon Acquisition Corp., a publicly traded special purpose acquisition company (SPAC) that will result in Flexjet becoming a publicly-listed company.
Once the transaction is complete, Flexjet is expected to be listed on the New York Stock Exchange (NYSE) under the ticker symbol FXJ.
With growth and a projected estimated 2022 revenue of $2.3 billion, along with a 2022 Adjusted Management EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $288 million, the company says its subscription-based recurring revenue model provides the basis for predictable revenue and cash flow.
“Having capital and currency will position us to expand market share at an accelerated pace in an opportunistic environment,” says Kenneth Ricci, Flexjet chair. “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. Additionally, the collective infrastructure necessary to operate this model would be very difficult to replicate. Accumulating the aircraft, customer base, global infrastructure, technology, and most importantly, the culture, would take years, if not decades.”
Todd Boehly, CEO, chief financial officer and chair of Horizon Acquisition Corp., agrees.
“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,” Boehly says.
The transaction values the combined company at an enterprise value of $3.1 billion. Proceeds from the deal are expected to fund its fleet, program and geographic and infrastructure expansion to include maintenance support facilities and private terminals.
It is backstopped with an up to $300 million common equity capital commitment from two investors or sponsors, which include Eldridge Industries and another entity. The commitment includes $155 million in non-redemption agreements and an up to $145 million redemption back-stop. At the transaction’s closing, Flexjet shareholders are expected to own 89% of the combined company.
Flexjet reports that its customer base includes about 10,000 committed contracts, with a 97% retention rate. According to company data, 35% of Flexjet’s fractional customers have been with the company for more than 10 years, while 55 percent have been with the company for more than five years.
Flexjet’s fleet exceeds 250 aircraft and it employs 3,100, including 1,000 nonunion pilots and 450 licensed maintenance technicians across nine office locations in the U.S., United Kingdom and Italy.
The company’s offerings include the Flexjet brand itself, which focuses on fractional jet ownership and leasing; Sentient Jet, which focuses on jet cards; and FXAIR and PrivateFly, which offer on-demand charter; and finally, Sirio, which focuses on full aircraft ownership. All are subsidiaries of Directional Aviation, a private investment firm.
The deal, subject to shareholder approvals and other customary closing conditions, is expected to be completed in the second quarter of 2023.
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