Ravi Thakran's SPAC plans merger with aviation business

The SPAC, Aspirational Consumer Lifestyle Corp, which raised $240 million towards the end of last year, will take an 8.8% interest in the merged entity, while the SPAC sponsor will hold 2.2%. Sponsors typically receive a 20% stake in the SPAC – not in the merged entity – for a nominal sum on completion of the listing. In addition, several institutional investors are participating in a $550 million private placement for a 20.1% holding.

The bulk of the equity – $1.89 billion – comes from existing investors in Wheels Up who are rolling over their interests. They will have a 68.9% stake in the merged entity. Wheels Up has raised $537.9 million in private funding, according to Crunchbase. Most recently, it completed a $128 million Series D round led by Fidelity, Franklin Templeton, and T. Rowe Price.

The transaction still needs to be approved by a majority of SPAC investors. On completion, they can exercise their warrants and purchase shares or redeem some or all their shares for cash.

Thakran launched the SPAC following his formal departure from L Catterton last year. He is in the process of raising one private equity fund targeting Gulf Cooperation Council markets and plans to raise a larger pool of capital for mid-market consumer investments in Asia. A source familiar with the situation said that Thakran would play a limited oversight role regarding Wheels Up.

Other directors of the SPAC will be more involved. They include Mark Bedingham, previously regional managing director for Asia Pacific at Moët Hennessy, and Lisa Myers, who spun out from L Catterton last year to form Clerisy, a consumer-focused PE firm. LVMH established L Capital and then merged it with Catterton to form L Catterton. L Catterton has a minority interest in the SPAC sponsor.

Wheels Up was founded in 2013 by Kenny Dichter as a membership-based private aviation network with its own fleet of aircraft. It now claims to be one of the largest private aviation platforms in the world, offering membership programs, on-demand private flights, aircraft management, and other services. It has a strategic partnership with Delta Airlines. Last year, the company flew more than 150,000 passengers, utilizing 1,500 owned, managed, and third-party partner aircraft.

"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," Thakran said in a statement. "We see many opportunities to leverage our experience and relationships to partner with other aspirational and luxury brands and to expand to international markets."

In the US alone, Wheels Up accounts for $690 million out of an overall private aviation market worth $31 billion. The company believes the total addressable market following a democratization of private air travel – by expanding access beyond the high net worth segment – could be $80 billion by 2025. Much like Uber in ride-hailing, it wants to serve as a de facto online booking platform that consolidates a highly fragmented market. The top 10 operators control 8% of industry capacity in the US.

Wheels Up has approximately 1,200 third-party-owned aircraft available for hire on its platform, with the rest either owned or managed by the company. An app allows members to view real-time inventory and purchase dynamically priced flights. There were 9,181 members at the end of 2020, including corporates. Around 40% of members make block purchases of flights.

Revenue came to $690 million in 2020, up from $385 million a year earlier. Cash flow remains negative, with adjusted EBITDA widening from -$21 million to -$53 million. A company presentation calculates the net loss up to 2019, when it was $107 million.

Aspirational one of the first of the most recent wave of Asia PE-related SPACs to identify a merger target. Earlier transactions include New Frontier Group's merger with Chinese hospital operator United Family Healthcare. An increasing number of SPACs are being raised by dealmakers and private equity firms, based in the region, although they are not necessarily targeting Asia-based assets.

The likes of Primavera Capital Group, Hopu Investments, Ascendent Capital Partners, Olympus Capital, and Vickers Venture Partners are all either directly or indirectly involved.

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• Topics
• North America
• IPO
• Consumer
• Asia
• L Catterton
• SPAC
• Transportation
• USA