Australian finance house buys Atlantic Aviation

 - October 8, 2007, 11:34 AM

At the end of last month, Macquarie Bank of Sydney, Australia, entered into an agreement to purchase Executive Air Support, the Dallas-based group whose sole business is Atlantic Aviation. The transaction is valued at US$238 million. Combined with the five FBO AvCenters already owned by Macquarie, the deal for the 10 FBOs will triple the number of Macquarie-owned aircraft-service operations in the U.S.

Commenting on the intended acquisition, chief financial officer for Macquarie Bank Greg Ward said Atlantic Aviation is “a well established business with strong existing management and a growth profile” in general aviation. He said the bank will “explore a range of future options for Atlantic Aviation, including the potential transfer to a Macquarie managed fund, company or partnership.”

Macquarie Bank acquired the FBO AvCenters and other aviation operations about two years ago when it bought Amports (American Port Services) from Associated British Ports of the UK. The Australian firm took over the former Amports’ businesses, namely the five FBO AvCenters at Pittsburgh International Airport (PIT); Louisville (Ky.) International Airport (SDF); New Castle County (Del.) Airport (ILG); Gulfport-Biloxi (Miss.) International Airport (GPT); and Burlington (Vt.) International Airport (BTV). Macquarie’s airport-management unit, now renamed AvPorts (from Amports), manages the following facilities: Atlantic City (N.J.) International Airport (ACY); Republic Airport, Farmingdale, N.Y. (FRG); Tweed New Haven (Conn.) Airport (HVN); Teterboro (N.J.) Airport (TEB); and Westchester County Airport, White Plains, N.Y. (HPN). Avports also manages the East 34th Street heliport in New York City.

This transaction marks the third time Atlantic Aviation, which had its origin back in the 1920s, has changed hands within the last decade. In 1997 Atlantic was sold to Legg Mason Merchant Banking after 70 years of ownership by the Du Pont family of Delaware. In fall 2000, Legg Mason sold the original flagship Atlantic facility at Wilmington, Del., to Dassault Falcon Jet. And later that same year, the remaining Atlantic FBOs were sold to EAS. Executive Air Support, established in July 1999, consists of several private-equity investment firms, and Lou Pepper, former sole owner of Million Air Interlink, the franchisee of the Million Air network of FBOs.

At press time, an official announcement had not been made by either EAS or Atlantic Aviation, but a source close to the situation acknowledged that an agreement had been signed. According to the source, Atlantic Aviation was not on the block, but its investors “couldn’t say no” to the unsolicited offer by Macquarie. The source also told AIN that the change in ownership will be “transparent to our customers and all our employees. It’s basically just a different set of stockholders and board of directors.”

The Atlantic name is expected to remain, and reportedly no decision has been made about folding Macquarie’s FBO AvCenters into the Atlantic Aviation chain.

Completion of the acquisition is subject to various regulatory requirements, including approval from U.S. airport authorities. AIN