We reported in our 21 May edition of CargoForwarder Global that Worldwide Flight Services (WFS), the Paris-headquartered airport ground handler was going to be sold by present owner, U.S.-based Platinum Equity. The new owner has been made public today (19 June).
One of four or five final candidates wins
In a rather short statement WFS CEO Craig Smyth announced today (19 June) that an agreement of exclusivity has been entered into whereby Cerberus Capital Management is to acquire 100% of
Worldwide Flight Services from present owner Platinum Equity.
Platinum in an own press release today were a little more informative, stating that a definite agreement had been reached to dispose of WFS ‚ for which evaluation could be up to EUR1.2 billion, and that closing of sale is expected during the last quarter of 2018 providing regulatory approvals are met.
There has been no mention of what Cerberus is expected to pay for the takeover and the Platinum indication of possible evaluation looks more like wishful thinking given the fairly poor cash flow generated by the company. In May of this year when four or five other companies were still in the running for WFS, it was said that there was talk about 5.5 to 5.75 financing picture which was based on a very conservative EBITDA picture of around €125 million. This figure was questioned in a recent article in Merger Markets which we mentioned in our article of 21 May.
The above figure seems to be somewhat confusing as recent 2018 first quarter figures show revenues as increasing, but EBITDA dropping below that of previous periods.
There was at that time also a strong rumour that Swissport, backed by their owners the HNA Group were also in the running for WFS. At that time it seemed very
unlikely due to HNA’s cash flow problems. In the meantime, the Far Eastern financial markets are stating that HNA has now committed itself to the sale of Swissport and other companies despite
having cancelled the planned IPOs during the past months. Will this then be the case?
Who knows - maybe Cerberus will turn things around and bid for Swissport as well!
Something new for Cerberus
An aviation handling company, of which WFS is one of the world’s leaders, has so far not been in Cerberus’s large portfolio of companies. This does not seem to bother them considering the
potential WFS brings with it. They (WFS) have an annual turnover of EUR 1.2 billion and serve more than 300 clients at 198 airports in 22 countries.
Craig Brooks, Managing Director of European Private Equity at Cerberus Capital Management states: “We plan to partner with Craig Smyth, and WFS’s management team and its 22,800 dedicated and
hardworking employees, to enhance its growth and services. Cerberus has a long outstanding presence in Europe and WFS will be a fantastic addition to our growing portfolio.”
The WFS managers can only hope that the new owners will stick around longer than Platinum did when they took over WFS just two years ago from LBO France.
WFS CEO Craig Smyth seems happy enough with the deal and commented that: “We believe that Cerberus is the ideal partner to support our continued transformation.”
Some may very well be interested in knowing which direction the ‘transformation’ is going to take place under Cerberus ownership.
We certainly are.
John Mc Donagh
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