Cerberus buys WFS in €1.2bn SBO

Alessia Argentieri
22 June 2018

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Cerberus Capital Management has acquired French air cargo handler Worldwide Flight Services (WFS) from Platinum Equity in a deal valued at approximately €1.2bn.

Cerberus is currently investing from its multi-strategy fund Cerberus Institutional Partners VI, which held a final close in April 2017 on $4bn.

The SBO ends a three-year holding period for US buyout firm Platinum Equity, which bought the company from LBO France in a deal valued at around €300-350m via its $3.75bn Platinum Equity Capital Partners III fund. WTS's management invested alongside Platinum Equity and retained a minority stake in the business. According to Unquote sister publication Debtwire, Morgan Stanley and ING arranged a €225m debt package to support the deal.

Under Platinum Equity's management, WFS grew both organically and through add-on acquisitions, and reached annual revenues of around €1.2bn. The company bought US-based cargo handler Consolidated Aviation Services in February 2016.

Currently, Platinum Equity is deploying capital to finance its European investments from its $6.5bn global buyout fund Platinum Equity Capital Partners IV. The firm acquired Pattonair, a global aerospace and defence supply chain provider headquartered in the UK in 2017 and more recently completed the $1.3bn acquisition of Wyndham's European vacation rental business. Other European investments in Platinum Equity's current portfolio include Exterion Media, Terratest, Ecka Granules and Electro Rent.

Previous funding
LBO France acquired WFS from Vinci, a France-based construction company, for €315m in August 2006. IFE Mezzanine also took part in the investment via its IFE II fund. Under LBO's ownership, WFS expanded across complementary sectors in Asia, Africa and the Middle East, and in June 2012 merged with 3i-backed Belgian business Aviapartner. Subsequently, WFS entered the Latin American ground-handling sector by acquiring a controlling stake in Brazil-based Orbital Group in 2014.

Company
Established in 1971 and headquartered in Roissy, near Paris, Worldwide Flight Services provides air cargo and ground handling to 300 airlines across 198 airports in 22 countries. The company employs 22,800 people and generated an EBITDA margin of around 10% from revenues of €1.2bn in 2017.

People
Platinum Equity – Louis Samson (partner).
Cerberus Capital – Brett Ingersoll (head of global private equity, senior managing director); Craig Brooks (managing director of European private equity).
Worldwide Flight Services – Craig Smyth (CEO).

Advisers
Vendor – Bank of America Merrill Lynch (M&A); Morgan Stanley (M&A); Baker McKenzie (legal).
Acquirer – Citigroup Global Markets (M&A); Linklaters (legal).