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 have made significant investments in Fixed Based Operators (FBOs), making 2021 a landmark year for M&A in this sector.
Major acquisitions include the $4.7 billion purchase of Signature Aviation by a consortium of PE firms and KKR's $4.47 billion acquisition of Atlantic Aviation, which later merged with Ross Aviation.
FBOs are attractive due to stable revenue streams from services like fueling and location, offering investors opportunities to boost EBITDA through scale and consolidation, a trend intensified by increased demand for business jets during the pandemic.
With major FBO networks now consolidated, future investment is expected to focus on acquiring and merging smaller, fragmented FBOs to build new scalable platforms.

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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.