Jet Aviation looks abroad after Permira share deal

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Swiss business aviation services specialist eyes expansion following equity injection

Switzerland-based business aviation services specialist Jet Aviation plans to expand its overseas activities with the purchase of the majority of its shares by private equity company Permira. The deal will be Permira’s first in the business aviation sector.

“We believe business aviation is a growing sector, particularly in Europe but also globally, and Jet Aviation is one of its prime assets,” says managing partner of Permira’s German operations Thomas Krenz. Jet Aviation has ambitious global expansion plans for next year. “Russia is an important market for us – our goal is to open an operation in Moscow next year,” the company says.

Jet Aviation adds that it plans to open a fixed-base operation (FBO) and maintenance facility in São Paolo, Brazil while “China is something we’re going to look into in the longer-term,” the company adds.

Jet Aviation, which provides maintenance, avionics, completions and engineering services, as well as aircraft sales, charter and staffing services, has plans to increase its FBO presence in the Middle East. It already has facilities in Jeddah, Riyadh and Kuwait as well as a maintenance facility at Dubai airport that opened in May.

The company’s significant US presence – around 40% of its sales in 2004 were generated in the USA – was a factor in Permira’s choice, Krenz says: “The company is very well managed and will exhibit significant growth. It is one of the few companies that will eventually have a global footprint in its market as its overseas expansion will continue.”

Permira has no strategic plan to make more standalone investments in the business aviation sector, Krenz says, but could provide equity to support Jet Aviation’s overseas plans through acquisitions.

“If the management sees it as part of its strategy to grow through acquisitions as well as organically we’ll definitely be listening carefully and be supportive.”

Subject to approval from antitrust authorities, the two parties expect to complete the deal by the end of September, when they will release more details about the transaction, including the size of Permira’s stake in Jet Aviation’s parent company Hirschmann Industrial Holding. Permira’s investors include public and corporate pension funds.

Jet Aviation posted sales of SFr724 million ($563 million) in 2004, compared with SFr721 million in 2003.

HELEN MASSY-BERESFORD/LONDON