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01 Feb 2021 | 13:33

WheelsUp to go public with $2.1bn value in Spac deal

(Sharecast News) - Private jet charter company WheelsUp is going public via a merger with a special purpose acquisition company (Spac) in a deal valuing the startup at an enterprise value of $2.1bn (£1.5bn), according to a report. WheelsUp will merge with a Spac launched in September by Ravi Thakran, the former head of L Catterton Asia, a private equity firm founded by LVMH, the Financial Times said.

The deal will generate up to $790m in cash, including up to $240m from Acquisition Consumer Lifestyle, Thakran's Spac, which also has LVMH and L Catterton as investors. Investors such as T Rowe Price, Fidelity and Franklin Advisors will provide $550m of investment at $10 a share, the FT said.

WheelsUp was founded in 2013 with backing from investors including tennis ace Serena Williams and tarnished Tour de France winner Lance Armstrong. The company allows members to charter private jets online. Membership costs $17,500 for the first year and at least $8,500 for subsequent years.

The airline industry has been flattened by the Covid-19 crisis but demand for charter jets has soared as rich people have tried to travel without being exposed to other passengers. Wealthy people have grown richer during the crisis even as economies have been battered.

Spacs boomed in 2020 by listing in public markets with a "blank cheque" to buy a company and take it public. The vehicles usually have two years to buy a target using proceeds from investors. David Solomon, Goldman Sachs's chief executive, said on 19 January the boom was not sustainable in the medium term.

WheelsUp will use some of the money to pay off debt and to fund expansion in Asia and the Middle East, Thakran said.

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