US fund GIP reaches agreement to acquire Signature Aviation

On the 01/11/21 at 12:26PM


Tuba Raqshan

Global Infrastructure Partners (GIP) has made a $4.6bn cash acquisition offer for Signature Aviation, outbidding those of private equity giants such as Blackstone and Carlyle.

GIP announced that they have reached an agreement with Signature Aviation, a private jet services firm backed by Microsoft's Bill Gates, on the terms of a recommended cash acquisition offer, made through its LP GIP IV Hancock Bidco. According to the agreement, subject to various regulatory approvals, the LP would acquire the entire issued and to be issued ordinary share capital of Signature.

The agreement came after Blackstone said on 8 January that it had won the support of Signature Aviation’s biggest shareholder, Gates' Cascade Investment. GIP, which was the former owner of London’s Gatwick Airport and currently owns the Edinburgh airport, has agreed to pay $5.50 in cash for each Signature share (GBP equivalent value being 405 pence), higher than Blackstone’s $5.17 per share offer. GIP had earlier made an offer in December, which was refused before the current offer was accepted. Sir Nigel Rudd, chair of Signature termed GIP’s offer as “attractive” for its shareholders. But the deal is far from done. Bidco, the joint venture between Blackstone and Gates' Cascade, and Carlyle have until 14 January to present a binding offer to Signature's board, in line with the British law on takeovers. 

Signature, like many businesses in the aviation sector, needs to address the challenges resulting from COVID, whilst market conditions and earnings are likely to remain subdued for some time, said Adebayo Ogunlesi, the chairman and managing partner of GIP. Ogunlesi, who had spent 23 years at Credit Suisse, added that as with all their other portfolio businesses, GIP believes that Signature can innovate and evolve as both, Signature and the aviation industry in general, delivers on their climate change commitments.

The US infrastructure fund said that it sees an attractive opportunity for Signature through organic growth and targeted, bolt-on acquisitions. If the acquisition goes through, GIP is likely to take it private from its current listing at the London Stock Exchange. Shares in the company, formerly known as BBA Aviation, rose 7.3% to 435.5 pence, topping the FTSE-250 index in early trading on 11 January, according to Reuters.