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 heavily invested in Fixed Based Operators (FBOs) in 2021, leading to major acquisitions like Signature Aviation and Atlantic Aviation, and prompting analysts to dub it "the year of the FBO in M&A."
FBOs are attractive to investors due to their stable revenue streams from services like fueling, strategic locations, and the potential for increased EBITDA through economies of scale and consolidation.
This M&A surge is a continuation of a decade-long trend, driven by investors' search for yield and further amplified by the pandemic's boost in demand for business jet travel, with future activity expected to focus on consolidating 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.