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:

Private equity firms aggressively invested in Fixed Based Operators (FBOs) in 2021, marking it "the year of the FBO in M&A" with multi-billion dollar acquisitions of major players like Signature Aviation and Atlantic Aviation by consortia including Blackstone and KKR.
FBOs are attractive to investors for their steady yield, strategic locations, essential services (like fueling), and the potential to increase profitability through scale, a trend further boosted by increased demand for private air travel during the pandemic.
Despite the recent large-scale acquisitions, the FBO market remains fragmented, suggesting that future investment will likely focus on consolidating smaller, independent FBOs to build scalable platforms rather than immediate sales of the few remaining major chains.

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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.