Avianca, a bankrupt Colombian airline based in Panama, has bought 19.9.% of Lifemiles, based in Bermuda, it doesn’t own for $195M from Advent International.
Avianca previously owned 70% of the Lifemiles and has an option to buy the rest (10.1%).
You can access LifeMiles here.
Here’s the regulatory announcement Avianca made this week:
Additionally, the Company informs it has also closed on the agreement to purchase 19.9% of Lifemiles’ equity from Advent International (prior owners of 30% of Lifemiles’ equity), at a purchase price of US$195 million (US$26.5 million of which were paid in cash and the remaining US$168.5 million were paid with Tranche A-1 loans); consequently, the Company currently owns 89.9% of Lifemiles’ equity and it has an option to purchase the remaining 10.1%.
Here’s Avianca’s organizational chart:
Avianca just secured some financing and decided to hand $26.5M of it to Advent International and the rest ($168.5M) of the purchase price in loans to acquire 19.9% of Lifemiles?
Perhaps it was the right time to buy back most of the Lifemiles the airline doesn’t own, leaving the outside private equity shop with a 10.1% stake.
It was the fad of the 2000s/early 2010s for the airlines to sell out their loyalty programs entirely or partially to unlock hidden value. Many have now regretted their decisions and brought them back in-house.