Investment firm buys Bombardier's Flexjet, places $1.8 billion order
TORONTO (Reuters) - Bombardier Inc (BBDb.TO: Quote) announced the sale of its Flexjet aircraft ownership business on Thursday, and the new owners agreed to order up to 245 Bombardier business jets valued at $5.2 billion.
A group led by Ohio-based private investment firm, Directional Aviation Capital, is buying the fractional ownership business for $185 million in a deal expected to close before the end of the year.
Flexjet offers clients the option of chartering a private jet or purchasing large blocks of time with access to a crew.
The new owners also placed a firm order for 85 of Bombardier's business aircraft valued at some $1.8 billion, based on 2013 list prices, with deliveries expected to begin next year. The order includes 25 Learjet 75, 30 Learjet 85, 20 Challenger 350 and 10 Challenger 605 jets. The order also includes options for a further 160 aircraft.
"The sale proceeds are relatively modest. The more important part of the announcement is the order flow that's going to come with that and the confidence that gives for their Learjet platform in particular," said Steve Hansen, an analyst with Raymond James Ltd.
"It's just really them focusing on their core business. This is a good opportunity to monetize it and package that with a fairly sizeable order and an even bigger set of options."
Bombardier, which has operated Flexjet for 18 years, is the world's only aircraft and train manufacturer, and builds both business and commercial aircraft.
The company plans to deliver the first of its new business Learjet 85 in the summer of 2014 and is preparing for the first flight of its all-new CSeries commercial jetliner, expected as soon as the coming days.
(Reporting by Solarina Ho. Editing by Andre Grenon)
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