Kenn Ricci, the founder of Directional Aviation, is launching Zanite Acquisition Corp a special acquisition company or SPAC.
Directional is the the parent company of Flexjet, Simcon, Constant Aviation, Sentient Jet, Nextant, Corporate Wings, PrivateFly and other business aviation companies.
Zanite, named after a rare gemstone, is looking to acquire a company or companies involved in the Fourth Aviation Revolution.
“We don’t want to do the same thing again and these are exciting times in aviation,” says Ricci. “We are looking at new areas like electric aviation, sustainable aviation and other emerging technologies.”
The SPAC will allow Ricci him to buy bigger companies than Directional Aviation usually targets. “We typically have around $30m to invest in equity in each new company. With leverage we can make that up to around $100m or $150m,” says Ricci. “There are private equity companies interested in several billion-dollar companies but there is a gap between what we do and what the large funds are doing. That is why we have filed for a SPAC.”
Zanite Acquisition is not the only SPAC looking at business aviation. Jefferies, the leading business aviation investment bank, is marketing one for Houston private equity firm Genesis Park.
Genesis Park Acquisition Corp’s management team includes David Siegel, former CEO of United Airlines and past chair of XOJET; Jonathan Baliff, former CEO of helicopter operator Bristow; Richard Anderson, former CEO of Delta Air Lines; and Wayne Gilbert West, former COO of Delta and a board member of Wheels Up.
“Our business strategy is to focus on all subsectors within aviation end markets, including aerospace and aviation services providers, whose customers are mainly aircraft operators in passenger, cargo, business aviation or other end markets,” says Genesis Park Acquisition in its prospectus. Genesis is looking for companies with a value between $500m and $1bn.
SPACs do not have to say which industry they are targeting, and others are looking at business aviation. Sudhin Shahani, CEO of Surf Air Mobilty, has said that he is hoping to take his company public through a SPAC “within the coming months.” Wheels Up has also been approached by at least one SPAC. Another business aviation specialist is working on launching a SPAC now. Once they have floated SPACs typically have two years to make an acquisition or hand the money back so they are pressured to buy.
Research from McKinsey & Co shows that SPACs led by industry experts typically outperform ones led by pure financiers by 40%. Sector experts should be able to spot opportunities using their network. McKinsey says that SPACs need managers with an “operational edge.”
Ricci has clearly demonstrated that he has this edge many times and wants to do it again with Zanite Acquisition Corp.
“There are a lot of SPACs, but we are offering something very different,” says Ricci. “Our strength is our industry knowledge. We are an inch-wide but a mile-deep.”
