Hangar8 and Gama Aviation to come together in £82 million deal
Gama Aviation has proposed a £82 million ($127 million) reverse takeover of Hangar8, the UK operator which is listed on the London Stock Exchange’s Alternative Investment Market (AIM).
Under the bid, Hangar8 would take on 27,341,960 new ordinary shares worth £2.80 each, giving Gama Aviation a valuation of £82.3 million.
The new company will be called Gama Aviation Plc, and would have an anticipated market capitalisation of £120.4 million. Jefferies was sole financial adviser to Gama.
If the reverse take-over is successful, the new company would then issue a further 6,125,379 new ordinary shares, with the £17,151,061 raised being used to pay off existing net debt, as well as providing further working capital for the new company.
A general meeting has been called for January 5, where shareholders will be asked to vote in favour of the reverse take-over. Cantor Fitzgerald Europe, acting on behalf of Hangar8, has already received instructions to vote in favour of the reverse take-over by 48.9 per cent of the existing ordinary shares, representing 69.8 per cent of the ordinary shares that are entitled to be voted.
“Hangar8 has achieved much in its short history but, in our highly regulated industry, success at all levels is now entirely driven by scale. It is no longer sufficient to manage a relatively small number of aircraft across a few countries.” said Hangar8 chief executive Dustin Dryden “Today our clients, many with ultra-long range aircraft, require their premier suppliers to be truly global too with the ability to supply a full range of private aviation services across the globe. The combination of our joint capabilities and experience, across all major aircraft manufacturers, and all major global trading hubs, becomes our new service baseline.”
Dryden added “This exciting combination of Hangar8 and Gama Aviation, to form Gama Aviation Plc in one step, delivers that, and moreover, does so in a way that organic growth and a series of smaller consolidations would perhaps take a decade or more to replicate, placing the new enlarged group firmly on the podium of global private aviation companies.”
Gama Aviation operates aircraft on behalf of Wheels Up. With companies in the UK, the US, the Middle East and Asia it is one of a few truly global business jet companies.
“Over the last 30 years, Gama Aviation has grown steadily to become one of the major business aviation service providers in the world. However, through this merger we will be creating a true global leader and one that is uniquely positioned for accelerated future growth,” said Marwan Khalek, CEO and founder of Gama.
“We believe the strategic rationale for this merger is clear to see. The two businesses enjoy a complementary geographical coverage; they have a good operational fit and have been pursuing similar growth strategies built on a profitable and robust business model. Bringing them together into Gama Aviation Plc will create a business of significant scale and one with unparalleled breadth of geographical coverage and depth of capability and service, enhancing our client offering.
“I am very excited by this merger and the platform that it creates on which we will continue to grow our business aggressively, both organically and through acquisition; a platform that will allow us to continue to offer excellent service to our customers, great opportunity to our people and good returns to our shareholders.
Our new shareholders understand that today’s announcement is a game-changing move and their belief is reflected in the strength of the share issue.”