FORT WORTH, Texas, August 16 - Worldwide Flight Services, one of the world's largest providers of ground services to the aviation industry, announced today the purchase of Miami Aircraft Support, Inc. (MAS), of Miami, Florida, in a transaction valued at $66.4 million. The acquisition will raise Worldwide's expected revenues this year to more than $300 million.
Worldwide Flight Services, formerly AMR Services, will now have nearly 10,000 employees at 82 airports around the world. The company was acquired in March by a private equity investment fund organized and managed by Castle Harlan, Inc., the New York merchant bank. The seller was AMR Corp., parent of American Airlines (NYSE: AMR).
Miami Aircraft Support provides ground services at 31 airports, including 19 where Worldwide Flight Services is not currently represented. Worldwide also noted that most of Miami Aircraft's ground services are provided to major air cargo express carriers such as Emery, United Parcel Service, DHL and BAX Global, which deliver time-sensitive packages and other cargo.
Peter Pappas, the chief executive officer of WFS, said the purchase of Miami Aircraft Support represents "an important first step in our disciplined strategy of expansion through internal growth and selected acquisitions and exemplifies the strong backing we are receiving from Castle Harlan.
"Miami Aircraft Support is a perfect fit with Worldwide Flight Services," Pappas said, "in terms of locations and lines of business. In addition, MAS's emphasis on providing the best in customer service is right in line with Worldwide's quality-focused culture."
Marcel Fournier, a managing director at Castle Harlan, negotiated the MAS transaction, as well as the acquisition last March of Worldwide Flight Services from AMR Corp. He said the latest acquisition "brings 19 new airports to Worldwide's extensive network and many new customers who we expect will expand their levels of activity with Worldwide in the United States and Europe. It gives Worldwide a very well managed company with a solid culture and management."
He added that the acquisition would increase Worldwide Flight Service's revenues by approximately 25 percent. Worldwide had revenues last year of about $230 million, while MAS's 1998 revenues amounted to about $56 million.
About 70 percent of MAS's revenues came from services to air cargo express delivery companies, Fournier said. These services include cargo loading, unloading and storage.
For passenger airlines, he said, MAS provides many of the same passenger and ramp services that Worldwide Flight Services provides, including baggage handling, cabin cleaning and passenger check-in and boarding.
With the acquisition of MAS, Fournier said, Worldwide will enhance its position as one of the world's leading independent providers of ground services to air cargo and passenger airlines. Worldwide will now provide services for more than 300 customers at 82 airports around the world, including 24 of the 30 busiest U.S. airports and five of the 10 busiest European airports. Worldwide will have close to 10,000 employees.
The principal seller of Miami Aircraft Support is Anthony Romeo, who founded the company in 1981. He will continue to be active in the company.
The investment fund that acquired Worldwide Flight Services in March is Castle Harlan Partners III, one of three investment funds totaling more than $1 billion that have been organized by Castle Harlan, Inc., and that represent major corporate and public pension funds, college endowments, foundations and individual investors. Since its founding in 1987, the firm has completed acquisitions exceeding $3.5 billion.
Castle Harlan's portfolio companies have included Delaware Management Company, the Philadelphia-based money-management firm with more than $32 billion in assets under management; Truck Components, Inc., the largest manufacturer of components for large-truck braking systems; Smarte Carte, the world's largest airport luggage cart rental company, and MAG Aerospace, the leader in worldwide manufacture of aircraft sanitation systems.
Currently among its portfolio companies are Universal Compression, Inc., a leading independent provider of natural gas compression equipment and services; Commemorative Brands, Inc., one of the leading manufacturers of class rings and other specialty jewelry under the ArtCarved and Balfour brand names, and the Verdugt B. V. group of acid salts businesses, based in the Netherlands. Verdugt was acquired from BP Amoco in April.
Castle Harlan was founded by John K. Castle, a pioneer in institutionalizing private equity investing through limited partnerships and the former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment banking firm, and by Leonard M. Harlan, founder and former owner and chairman of The Harlan Company, a diversified real estate and corporate finance advisory firm.