Aviapartner Goes Almost 100 Percent American

The Brussels based ground handling company, Aviapartner has been urgently looking for a new owner since the discussions for a takeover by Worldwide Flight Services (WFS) fell through in 2013. Now U.S. equity house HIG has added the ground handler to its portfolio.

Aviapartner has become part of HIG Capital’s Transportation and Logistics portfolio  /  source: hs
Aviapartner has become part of HIG Capital’s Transportation and Logistics portfolio / source: hs

The market was somewhat surprised that the deal with WFS, despite many months of negotiations, did not work. All the more surprising considering the well known market professionality and strength of the large French handling company.
WFS was seen as the ideal candidate for a takeover of Aviapartner due to its own strong European presence. One had to wonder what the WFS managers may have found in their due diligence efforts that made them change their minds.

Since then, Aviapartner, which was 100 percent in the hands of 3i, a British equity house was on the outlook for a new investor.
3i managed to shelve off 50 percent in August of 2014 to HIG Capital, a well known American investment company. The remaining 50 percent was in turn given over to Laurent Levaux (Aviapartner CEO) and the management team. This at an undisclosed price.

It’s been a tough twelve months
Aviapartner has been plagued with mishaps, loss of business and strikes during the past twelve months or so.
The Aviapartner Cargo set-up in Frankfurt, Germany, was sold completely to Celebi, the Turkish ground handling entity in 2014.
The question then remained as to what would happen to the rest.
It seems that Celebi had looked at the overall Aviapartner scenario, did their own due diligence and then they also decided that Frankfurt cargo was the only viable part of the operation which could fit in their portfolio.

The Brussels and Amsterdam Aviapartner operations remained as the mainstay of the company revenues, offering passenger check-in, ramp services and cargo services to various carriers.
Both areas, especially Brussels have come under tremendous pressure from Avia’s competitors. Both Swissport and WFS are big players in this region.
Aviapartner also has handling set-ups in Italy, France and Germany, whereby these services are mostly for passenger related handling.

HIG Capital takes almost 100 percent
Last week it was announced that HIG Capital, through its European daughter company, has now acquired almost all of the remaining 50 percent capital. There is no information as to what HIG has paid for the remainder. Information has it that Mr Levaux and some of his managers still have a very small minority share.
Whether Levaux will stay on board in the future remains to be seen.
However, when looking at HIG’s portfolio of companies, it becomes very clear that Aviapartner is the only real aviation related company in there.
So, it would at least make sense to keep the present management on board.

Equity houses have basically only one aim.
“Invest, feed them up and sell them.”
The ground handling business is a hard fought market and entities such as WFS, Celebi, Swissport and Menzies have got stronger over the past years through their own acquisitions.

Where does this then leave Aviapartner in the future?
Will then HIG Capital itself look at bidding for control of one or other of Avia’s present competitors?
Could it be Menzies or even WFS who may be in their sights?
It is clear that Aviapartner, which started many years ago as a company owned by Alex Veroughstraete and the van Zakenman family, needs strong partners to come out of the troubled times and be an attractive sale for HIG in the future.

John Mc Donagh

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