Business & GA

BBA Landmark Acquisition Aims to Strengthen ‘Fragmented’ FBO Market

By Juliet VanWagenen | September 28, 2015
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[Avionics Today 09-28-2015] In a deal valued at $2.065 billion, U.K.-based global aviation aftermarket service provider BBA Aviation has proposed to purchase business aviation Fixed-Base Operator (FBO) and charter services company Landmark Aviation. With BBA Aviation Signature already the largest FBO in the world set to absorb Landmark, the third largest, Rolland Vincent, of business aviation consulting firm Rolland Vincent Associates, calls this a “big deal” in more ways than one. 
BBA Aviation has proposed to purchase Landmark Aviation to close the gap on the fragmented FBO market. Photo: BBA Aviation. 
“Landmark has an impressive U.S. footprint (61 of 68 properties in the acquisition are in the U.S.) with limited geographical overlap with BBA Aviation. Landmark has a very good existing reputation with its customers, who will now have access to a broader network and its associated privileges. Along with their recent push to expand partnerships with independent FBOs through Signature Select, there is no faster and surer way to expand the Signature brand at more than 50 executive airport locations than through a transaction such as this one,” Vincent told Avionics Magazine. 
Landmark currently has 68 locations in the United States, Canada, France, and the United Kingdom, and is one of the leading charter operators in the United States with more than 110 aircraft under its charter and management. The FBO has already been sold three times since 2007 and twice to its current owner The Carlyle Group. As the Carlyle group does not focus on business aviation as a core area of business or expertise, Vincent believes it was only a matter of time until they “would exit their investment to a strategic buyer like BBA Aviation.”
Along with the proposed acquisition, BBA also announced the launch of a rights issue to raise $1.1 billion in proceeds, which will be used in part to finance the acquisition. The company is also purchasing 11 Maintenance, Repair and Overhaul (MRO) facilities from the Carlyle Group.
The board of directors at BBA believes the acquisition represents a good opportunity for Signature Flight Support to improve operations across the fragmented FBO market, according to a recent press release about the deal. The acquisition also aims to deepen the BBA’s exposure to the business and general aviation markets. 
Although the deal is still subject to regulatory approval, Vincent doesn’t believe there will be any significant hurdles when it comes to pushing the deal through.
“Even with the combination of Signature and Landmark properties, the BBA network will still encompass less than 200 facilities worldwide. The FBO business remains quite fragmented worldwide, and we would not expect there to be any insurmountable regulatory hurdles to the deal,” said Vincent.
Although BBA is currently the largest FBO, the company is poised to expand its market presence heavily in the U.S. through this acquisition, and it’s likely they will look to expand further worldwide, particularly in Europe and Asia, according to Vincent.
“The Landmark acquisition will bolster BBA Aviation’s U.S. market presence, where about 60 percent of business jets are based, but international markets (after a recovery from the current pause) are forecasted to grow as fast and in may cases even faster going forward,” he said.
With virtually no construction underway for new U.S. airports, Vincent believes the value of the existing properties will likely increase for BBA, which is positioning itself to grow its business aviation presence strategically through other acquisitions.

“BBA has been very acquisitive, and the opportunity to grow its FBO franchise while expanding into aircraft management, charter and MRO and marry up Landmark with Signature seems like a natural fit,” Vincent added. 

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