FBO Market Sees Strong Interest From Private Equity Funds

Private equity investors have been earnestly searching for yield, and a major investment target garnering interest has been fixed based operators (FBOs).

Michael Wildes

Tuesday, November 23, 2021 at 04:16 PM ET

Verified

Signature Aviation was purchased by a consortium of private equity firms in May. [Courtesy: Signature Aviation]

Key Takeaways:

2021 marked a significant surge in private equity M&A activity within the Fixed Based Operator (FBO) sector, characterized by multi-billion dollar acquisitions of major networks like Signature Aviation and Atlantic Aviation.
FBOs attract investors due to their stable yields, strategic locations, diverse service offerings, and the opportunity to achieve economies of scale to boost EBITDA and reduce operational costs.
This heightened investor interest is a continuation of a decade-long trend, accelerated by the pandemic's impact on private jet demand, and is expected to lead to further consolidation among smaller, fragmented FBOs.

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Private equity investors have been earnestly searching for yield, and a major investment target garnering interest has been fixed based operators (FBOs).

In May after a bidding war, a consortium of private equity firms—including Blackstone, Global Infrastructure Partners, and Cascade Investments—worked together to purchase Signature Aviation for $4.7 billion from Global Infrastructure Partners. Signature operates the world’s largest FBO network with more than 200 locations globally.