Platinum Equity to sell WFS for €1.2bn

August 2018 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

August 2018 Issue

Divesting itself of an asset which gave it significant momentum in Europe, US private equity firm Platinum Equity has signed a definitive agreement to sell Worldwide Flight Services (WFS) to affiliates of Cerberus Capital Management, L.P. in a transaction valued at approximately €1.2bn.

Since Platinum Equity acquired WFS in 2015, the air cargo handler has grown significantly, both organically and through a transformative add-on acquisition, and is now the largest and one of the world’s leading providers of ground handling and technical services. Headquartered in Paris, WSF’s 22,800 employees serve over 300 airlines at 198 major airports in 22 countries on five continents.

“Through a combination of growth and operational initiatives, WFS has evolved and expanded significantly over the past three years and today enjoys record top-line and earnings performance,” said Louis Samson, a partner at Platinum Equity. “The company’s success is a tribute to a strong partnership with a talented management team, and the dedication of hardworking employees all over the world. We are proud of everything we accomplished together.”

Furthermore, during Platinum Equity’s ownership, WFS strengthened its leadership team underneath chief executive Craig Smyth, installed new financial controls and other best practices throughout the organisation and expanded the company’s footprint. For example, in 2016, Mr Smyth oversaw the acquisition of Consolidated Aviation Services (CAS), one of the leading cargo handlers in the US.

“In recent years, WFS has successfully transformed into a leading cargo and ground handler with a truly global presence,” said Mr Smyth. “Platinum Equity’s financial and operational support has been instrumental to our success. They invested in our growth and as a result we are well positioned for long-term success.”

In the view of Brett Ingersoll, head of global private equity and senior managing director of Cerberus, WFS is a market leader in aviation services and is positioned to benefit from attractive long-term industry growth. “Cerberus has extensive operational experience and a successful track record in aviation and we are excited to support WFS’s next stage of growth,” he said.

Founded in 1992, Cerberus is a global leader in alternative investing with approximately $34bn in assets across complementary credit, private equity and real estate strategies. With Cerberus being an experienced and capable new partner, Mr Samson believes that WFS is now well positioned to continue its growth trajectory in the years to come.

Bank of America Merrill Lynch and Morgan Stanley served as financial advisers to Platinum Equity and Baker McKenzie was Platinum Equity’s legal adviser. For Cerberus, Citigroup Global Markets Limited served as financial adviser and Linklaters LLP was legal adviser.

“We plan to partner with Craig Smyth, and WFS’s management team and its dedicated and hardworking employees, to enhance WFS’s growth and services,” said Craig Brooks, managing director of European Private Equity at Cerberus. “We have a longstanding presence in Europe and WFS will be a fantastic addition to our growing portfolio.”

Mr Smyth added: “WFS has transformed into a leading global aviation handling player in recent years through growth and operational initiatives. We believe that Cerberus is the ideal partner to support our continued transformation.”

The sale of WSF to Cerberus is expected to close during the fourth quarter of 2018, subject to regulatory approval and certain closing conditions.

Fraser Tennant