Wheels Up is planning to go public via a merger with special purpose acquisition company, Aspirational Consumer Lifestyle Corp (NYSE: ASPL). The transaction values Wheels Up at an enterprise value of $2.1 billion.

Background

Wheels Up was founded in 2013 by entrepreneur Kenny Dichter. The company started with an innovative membership model and an exclusive fleet of King Air 350i aircraft. In the seven years since it was founded, Wheels Up has grown significantly, including several strategic acquisitions and an exclusive co-marketing partnership with Delta Air Lines. The latest acquisition, of Mountain Aviation, was just announced last month.

Today, Wheels Up is one of the largest private aviation platforms in the world, offering a comprehensive total aviation solution including membership programs, on-demand private flights across all cabin categories, aircraft management, whole aircraft sales, corporate solutions, signature events, and commercial travel benefits through its strategic partnership with Delta Air Lines. In 2020, the Company had flown more than 150,000 passengers, utilizing its access to over 1,500 owned, managed, and third-party partner aircraft.

Transaction Overview

On February 1, 2021, Aspirational entered into a definitive agreement (the "Merger Agreement") to combine with Wheels Up through a combination of stock and cash financing. The transaction values Wheels Up at an enterprise value of approximately $2.1 billion.

The transaction is expected to deliver up to $790 million of gross proceeds to the combined company, including the contribution of up to $240 million of cash held in Aspirational's trust account from its initial public offering in September 2020. The combination is further supported by a $550 million PIPE (Private Investment in Public Equity) at $10.00 per share, including commitments from T. Rowe Price, Fidelity, Franklin Advisors, Durable Capital, HG Vora Capital Management, Third Point, Luxor Capital, and Monashee, among others.

Existing Wheels Up shareholders will roll 100 percent of their equity into the new company. Upon completion of the transaction, Wheels Up expects to have up to $750 million in cash on its balance sheet to fund operations and support new and existing business initiatives.

The transaction has been unanimously approved by Aspirational's Board of Directors and the independent directors of Wheels Up's Board of Directors, and is expected to close in the second quarter of 2021. The closing is subject to approval by Aspirational and Wheels Up's respective shareholders and other customary closing conditions, including any applicable regulatory approvals.
Once the transaction is completed, the company will be listed on the New York Stock Exchange under the symbol "UP".

Management

The Company's current management team will continue to lead Wheels Up. Aspirational's Chairman and Chief Executive Officer, Ravi Thakran, former Group Chairman of LVMH South and Southeast Asia, and Australia /New Zealand and former Managing Partner of L Catterton Asia, will join the combined company's Board of Directors upon completion of the transaction.

Kenny Dichter, Founder & CEO of Wheels Up said "We are excited about crossing this milestone and our new partnership with Aspirational. We believe this will allow us to actualize our founding goal of democratizing private aviation, through our unique membership model, suite of products and benefits, and by bringing the shared economy to private aviation through our Wheels Up app. We are looking forward to joining forces with the Aspirational team as we continue to accelerate our global growth and expansion."

Ravi Thakran, Chairman & CEO of Aspirational added "When we founded Aspirational, Wheels Up was exactly the kind of company we wanted to partner with. Kenny and his world-class team have created a truly iconic brand built upon years of exceptional, personalized customer experiences. They are a clear leader and innovator in the space and we look forward to working together to introduce Wheels Up to the global stage. We see many opportunities to leverage our experience and relationships to partner with other aspirational and luxury brands and to expand to international markets."

Comment

Most private aviation companies are private entities, so Wheels Up will be one of the very few that are publicly listed. Two others that are public are NetJets which is owned by Berkshire Hathaway (NYSE : BRK.A), although NetJets is a relatively small part of the Berkshire Hathaway portfolio of companies. The second is Air Partner which is traded on the London Stock Exchange as LSE: AIR and is a more straightforward air charter broker and aviation safety & security consultancy.

One of the advantages of working with a public company is that you can look and see how they are doing financially, so you can tell if you are relying on a financially stable company.

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