KKR& Co. (NYSE:KKR) has more than doubled the value of its investment in Atlantic Aviation in roughly five years, turning a $4.5 billion acquisition into a private aviation platform now valued at nearly $10 billion.
The deal offers insight into how private equity firms can create value through a combination of acquisitions, infrastructure investment and exposure to long-term growth in private aviation.
About the Deal
KKR acquired Atlantic Aviation in 2021 from Macquarie Infrastructure Partners in a transaction that valued the company at approximately $4.5 billion. Since then, Atlantic has significantly expanded its footprint across the U.S. fixed-base operator (FBO) market.
FBO’s provide services to private and business aviation customers, including aircraft fueling, parking, hangar space, ground handling and passenger amenities. While they may be less visible than airlines or aircraft manufacturers, FBOs provide critical infrastructure for private aviation.
Building A Bigger Aviation Platform
One of KKR’s biggest moves came through the combination of Atlantic Aviation with Ross Aviation, another FBO operator in 2022. The transaction helped Atlantic expand its presence across key U.S. aviation markets and build a larger national network. Atlantic now operates more than 100 FBO locations, compared with 69 when KKR acquired the company.
The expansion reflects a familiar private-equity strategy: acquire a platform in a fragmented market and use acquisitions, operational improvements and additional investment to increase its scale and value.
KKR has also invested in Atlantic’s facilities and services as demand for private aviation has grown. The company has benefited from increased private and business aviation activity, while its airport locations can provide a relatively durable source of demand because access to desirable airport real estate and operating rights can be difficult for competitors to replicate.
Private Equity’s Broader Aviation Bet
Atlantic’s growth comes as private equity firms are increasing their exposure to aviation across the industry.
KKR itself has been active beyond its investment in Atlantic. In June, the firm committed another $1.4 billion to aircraft leasing with Altavair, building on a broader partnership in which KKR-managed funds have committed billions of dollars to aircraft leasing and lending.
Apollo Global Management (NYSE:APO) has also been making major aviation bets. Apollo-managed funds joined Sumitomo, SMBC Aviation Capital and Brookfield in completing the acquisition of Air Lease Corp., creating a major aircraft-leasing platform with more than $29 billion in assets.
Private equity is also moving closer to the airline business. Apollo agreed this year to acquire European low-cost carrier easyJet in a deal valued at roughly $7.7 billion, highlighting investors’ willingness to deploy capital across different parts of the aviation ecosystem.
Taken together, the deals suggest private capital is looking beyond airlines and aircraft manufacturers and increasingly targeting the infrastructure and hard assets that underpin aviation.
KKR Isn’t Fully Exiting
The nearly $10 billion valuation also highlights the returns KKR has generated without completely exiting its investment. Apollo-managed funds are acquiring a significant stake in Atlantic Aviation, but KKR is retaining a substantial ownership position.
That structure allows KKR to realize some value from its investment while maintaining exposure to Atlantic’s future growth. It also reflects a broader trend in private markets, where sponsors are increasingly using partial sales and new investors to generate liquidity from mature portfolio companies without giving up their entire positions.
For KKR, Atlantic Aviation represents more than a successful five-year investment. It demonstrates how private equity can combine a platform acquisition with consolidation and infrastructure investment to build a much larger business.
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