Wheels Up reported to be in talks with SPAC

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by Alasdair Whyte
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Reuters has reported that Wheels Up is in talks with Aspirational Consumer Lifestyle Corp; a blank cheque or Special Acquisition Company (SPAC).

A spokeswoman for Wheels Up said that the company does not comment on rumours or speculation.

At the end of 2020, Kenny Dichter, founder and CEO of Wheels Up, told Corporate Jet Investor that the company was always looking at options including: a traditional IPO; being bought by SPAC or a direct listing where the existing shares could be sold to investors. But he also stressed that the company’s shareholders were not in a hurry to sell.

Aspirational Consumer Lifestyle floated in September 2020. Credit Suisse managed the IPO. It was sponsored by  L Capital a joint venture between LMVH, the luxury brands company owned by Bernard Arnault and private equity firm Catterton.

The SPAC is headed by Ravi Thakran, chair and CEO, Mark Bedingham, vice chairman and Lisa Myers, President. Thakran and Bedingham have specialised in the Asian luxury goods market.

Thakran is group chairman of LVMH South and South East Asia and Australia/New Zealand. He also founded L Capital, which merged with Catterton Asia. Thakran has led investments into a number of Asian luxury companies and been a director on several boards.

Bedingham is President and CEO of Singapore Myanmar Investco Ltd, an investment and management company focused on Myanmar. He was also MD of Moët Hennessey Asia-Pacific and has worked heavily in Japan.

Myers is the co-founder and managing partner of Clerisy, a new global private equity firm focused on consumer companies and consumer-technology. She was a partner at  L Catterton and before that an Executive Vice-President in Templeton’s Global Equity Group.

 

Quick take:

First, this is no surprise. Wheels Up has been approached by several SPACs. Kenny Dichter, its founder, has said that he has planned to IPO the company on stage at many Corporate Jet Investor Miami conferences.

At first reading of its prospectus, Aspirational Consumer Lifestyle does not look like a natural fit.

The SPAC said that it planned to focus on companies that:

  • -“Have a high quality and aspirational brand with an established consumer base and a leading presence in the markets in which they operate; 
  • -Are fundamentally sound but are underperforming their potential; 
  • -Are at an inflection point, such as requiring additional capital or expertise, where we believe we can drive improved financial performance; 
  • -Offer opportunities to enhance financial performance through organic initiatives and/or inorganic growth opportunities that we identify in our analysis and due diligence; 
  • -Have the potential to further improve their performance from our management team’s knowledge of the target’s industry, proven operational strategies, and past experiences in scaling businesses;
  • -Have an international expansion plan as part of their overall growth strategy and can leverage our management team’s operational experience in global markets;
  • -And Offer an attractive potential return for our shareholders, weighing potential growth opportunities and operational improvements in the target business against any identified downside risks.”

 

While Wheels Up could be said to be at an inflection point and needs new capital, it is hard to say that the fast-growing business has been underperforming.

The SPAC team’s Asian focus is also not an obvious advantage. Wheels Up has always planned to go international – it negotiated the right to be the only King Air fleet buyer in North America and Europe when it launched.  But  it has chosen to focus on the US market. Asia is a long way off.

However, SPACs do often change their focus. One SPAC which is now buying a space company was originally launched to invest in the cannabis industry.

We now need to wait for an official SEC statement.

 

Also read: SPAC attack – Kenn Ricci launching SPAC

Reuters – Wheels Up in talk with SPAC to go public 

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