Flexjet, Inc.has recently announced an $800 million equity investment from luxury goods titan Bernard Arnault, who is currently ranked as the eighth richest person in the world by Forbes. This investment brings him into the private jet industry, where Warren Buffett has held the top spot since his acquisition of NetJets in 1998.
The investment, made through L Catterton, is said to be the largest equity investment ever made in a private jet travel provider. Unlike Buffett’s complete acquisition of NetJets, Flexjet, Inc.will remain independent, with chairman Kenn Ricci as the largest shareholder. The new investors, including Todd Boehly (ranked 379th on the Forbes list), will hold a 20% stake in the company, valuing it at around $4 billion.
At the 2023 annual meeting of Berkshire Hathaway, Charlie Munger praised NetJets, stating that it could be worth as much as any airline. In comparison, American Airlines, the least valuable of the big four, was valued at around $9 billion.
Ricci, who bought Flexjet from Bombardier in 2014 for $185 million, merged it with Flight Options, a company he founded in 1998 and repurchased in 2008. The company offers fractional aircraft shares and leases under the Flexjet brand, as well as jet card services through Sentient Jet (acquired in 2012). Flexjet, Inc.also includes an on-demand charter broker, FXAir, European operators, and a network of MRO locations for maintenance and refurbishment.
The company’s revenues have more than doubled from $1. 8 billion in 2020 to $3. 8 billion in 2021, with projected EBITDA of $425 million in 2025. L Catterton, established in 2016 through a partnership between Catterton, LVMH, and Groupe Arnault, announced an $11 billion capital raise in May. LVMH, led by Bernard Arnault, is a luxury conglomerate with over 75 brands, including Louis Vuitton, Dior, Fendi, Tiffany & Co, and Hublot.
In 2022, Arnault reportedly sold his own private jet to avoid flight trackers. Ricci believes that high-net-worth individuals and companies are increasingly turning to private jet services to protect their privacy and ensure availability. Flexjet, Inc.currently serves 40% of Fortune 500 companies, many of which have their own corporate jets.
In a press release, Ricci noted that L Catterton’s partnership with LVMH and its family of brands provides the perfect opportunity for collaboration in areas such as consumer insights, brand strategies, retail expansion, and luxury product delivery.
Flexjet, Inc.currently has 11 private terminals in high-demand locations, with plans for more. These terminals are reserved for its customers, providing a more private and elevated experience.