Rhône Capital invests $200 million in VistaJet


Rhône Capital is investing $200 million in VistaJet, valuing the business jet operator at more than $2.5 billion.

“With the investment announced today, the equity valuation in excess of $2.5 billion and our fully scalable technology driven business model, VistaJet is ideally placed to take advantage of the opportunities to shape the market as it further develops in the years to come,” said Thomas Flohr, founder and chairman of VistaJet.

Steven Langman, a co-founder of Rhône Capital, will join VistaJet’s board.

“We seek to invest in the leaders in any sector, and with VistaJet we have invested in the best. We have closely followed Thomas and VistaJet for some time, and we are convinced that the company’s business model and global strategy give it a superior advantage in the marketplace,” said Langman.

The investment comes when VistaJet is no longer looking to add to its 70 aircraft fleet. Instead, it is now focusing on selling new programmes and launching VistaJet Direct, a new digital membership app.

In the past, Flohr has said that VistaJet has not been interested in acquiring other companies but this has changed.

Also read: VistaJet matures but wants to keep disrupting: Thomas Flohr interview July 2017

“With the investment announced today, we are ideally placed to take advantage of market consolidation, and to build on our position in the sector,” he said.

Langman added: “We share management’s vision to significantly grow the business, both organically and by acquisition, and we are prepared to make further investments, if needed, to achieve these goals. We are pleased to have invested in this dynamic industry pioneer.”

VistaJet says that its EBITDA rose by 32% in the first six months of 2017 compared with the year before. It said it had a 51% growth in the total number of Subscription Program Hours sold and programme membership revenue reached a record high of 63% of total revenue, up from 55% in the previous quarter. It had a customer retention rate of 91%.

Flohr added: “Today’s announcement is further confirmation of VistaJet’s leading status in the market, and represents a real vote of confidence in our strategy and vision. Rhône fully endorses our philosophy and approach, and will be a valued partner in the next stage of the VistaJet journey. Together, we will continue to focus on expanding our global market share.”

Interview: Ian Moore, chief commercial officer, VistaJet

Corporate Jet Investor: Have you already identified acquisition targets?

Ian Moore: We feel strongly that market consolidation is coming and we are ideally placed to build on our position in the sector. The investment from Rhône Capital puts us in a great position should we want to act in the future.

Corporate Jet Investor: Would you like at other parts of the industry like FBOs or maintenance?

Ian Moore: No. This is not part of the management discussions. For the last 15 years we have been focused on being the best operator and creating unique customer experiences. We have no plan to change our focus.

Corporate Jet Investor: Why did VistaJet decide to get an investor now?
Ian Moore: Rhône Capital actually came to us. We did not do a round of private equity pitches and then find Rhône.

Some of their principals had experienced VistaJet and they liked the product and what VistaJet stands for. They looked at our numbers and performance and it resonated with them. Most importantly they believe in what we are doing and the management team.

We are absolutely delighted. It is a great validation of our business model.

The principals also got to know Thomas and Nina [Thomas Flohr’s daughter]. We are a family business and we are focused on knowing people rather than just knowing names.

Corporate Jet Investor: It is interesting that you have decided to take an investor at a time when you are not looking to grow your fleet?

Ian Moore: It is true that we are not looking to grow our fleet in the next few years. We have invested enough in aircraft to allow us to keep growing customers rapidly – although we may still look at new models like the Global 7000 in the future. But we are also investing heavily in IT. We are in a unique position where we have access to our own fleet of aircraft worldwide and we are releasing new products because of our unique platform.

The investment from Rhône Capital also means that we continue to have a very strong balance sheet for the next few years which will allow us to push out new products and take advantage of acquisition opportunities.

Deal summary: Rhône Capital investment in VistaJet
Date: 23 August 2017
Size: $150 million first tranche, then $50 million secondary acquistion
Financial adviser to VistaJet/Thomas Flohr: Jefferies
Legal adviser to VistaJet/Thomas Flohr: Linklaters, Fenech & Fenech (Malta)