Corporate Jet Investor

Kenn Ricci plans to list FlexJet [NYSE: FXJ] with Boehly

Kenn Ricci, the founder of Directional Aviation, is arguably the most successful business aviation investor ever.

But until last year when he launched a special purpose acquisition company (SPAC) and merged with Embraer’s electric vertical aircraft spin-off EVE, he had avoided public markets.

Now he is planning to take Flexjet, the fractional jet company, public. He launched his Zanite SPAC with a long-term partner and he is doing the same again. Flexjet plans to merge with Horizon Acquisition Corporation II a SPAC launched by Todd Boehly, founder of Elridge Capital. Boehly, is CEO, CFO and chairman of the SPAC, and a long term co-investor with Ricci.

The sale is expected to close in the second quarter of 2023.

“We are writing to share some significant news regarding Flexjet’s next chapter. Tomorrow [October 11th], we will announce that we have made the decision to enter the public markets and become a publicly listed company,” wrote Ricci and Flexjet CEO Mike Silvestro in an email to customers.

Listing will also raise the profile of Directional’s highly regarded management team including.  Silvestro will be co-CEO along with Andrew Collins, CEO of jet card company Sentient Jet. Mike Rossi, Ricci’s partner for 40 years, will be CFO. Ricci will be chairman.

“Our industry has seen significant growth over the last few years, and Flexjet has never been in a better position to find opportunities to grow our service offerings in this opportunistic environment,” said the email. “We will parlay our existing profitability with access to capital and use that as a launch pad to continue to enhance your customer experience through fleet, program, and geographic expansion as well as significant infrastructure investment including maintenance support facilities and private terminals. Please know our leadership team is as committed as ever and will remain in place.”

Ricci and Boehly first worked together when Boehly was president of Guggenheim Partners. Directional was a strategic advisor to Guggenheim and an anchor investor in the Guggenheim Aircraft Opportunity Fund headed by Nicholas Sandler.

In 2016, Boehly left to launch his own firm Eldridge. He later acquired a number of investments from Guggenheim – including the aircraft portfolio.

Together with capital from Directional and Sandler, Eldridge acquired Guggenheim’s aircraft financing business. The business was then merged with Eldridge’s newly formed Stonebriar, with Ricci joining the board. Eldridge is also an investor alongside Directional in Flexjet and in Simcom. Sandler sits on both boards.

Ricci launched Flight Options a fractional operator that started with pre-owned aircraft in 1998. It grew quickly soon ordering new aircraft. Flight Options fleet was dominated by Beechcraft and Hawker aircraft, which was at the time owned by Raytheon. In 2001 it merged with Raytheon Travel Air (and ordered $900m of new Raytheon aircraft types). A few years later Ricci offered to buy Raytheon out but was instead outbid and sold his stake. In 2009 it was able to buy back Flight Options.

In 2013 he acquired Flexjet from Bombardier for $185m – as well as taking on firm order for 85 Bombardier aircraft. Flight Options was later rebranded as Flexjet.

Flexjet has grown significantly since then. In 2020 it launched in Europe headed by NetJets Europe veteran Marine Eugène.

Flexjet will trade with the ticker: FXJ and join Wheels Up (NYSE: UP) on the exchange. The two companies have very different business models – Flexjet, buys aircraft and then sells shares to owners; Wheels Up sells charter on both its aircraft and third-party ones. The listing of Flexjet should encourage more investors to look at business aviation.

Kenn Ricci is speaking at Corporate Jet Investor Miami 2023