3i fails to sign Jet Aviation deal

After three months of exclusive negotiations building up to the December 5 deadline, the UK private equity firm has not signed an agreement for the $500m purchase of the Swiss charter airline.

UK private equity firm 3i, which has been in exclusive talks since September to acquire Swiss-based Jet Aviation, has failed to sign a deal ahead of the December 5th deadline to acquire the charter airline company for $500m. Market practitioners speculate that a challenging due diligence process may be responsible for the delay.

Jet Aviation, which put itself up for sale last year, expects to know which company it will go with by the end of the month, according to The Deal. A spokesman for Goldman Sachs in Frankfurt, which co-coordinated the auction, declined to comment on any aspect of the deal.

Sources close to 3i said that the private equity firm was busy in talks with the Swiss airline a couple of months ago, but that the negotiations had gone quite.

With over 3,500 employees in over 60 locations worldwide, Jet Aviation provides services including maintenance, engineering and aircraft sales alongside passenger services. Jet operates over 150 aircraft in Europe, United States and in the Middle East with about 60 per cent of its operations based in Europe.

3i was one of a number of financial buyers looking at a possible offer for the company in October this year. Prince Alwaleed Bin Talal Abdulaziz Al Saud, possibly working with Investcorp, Texas Pacific Group, Cypress Group and Berkshire Partners also appeared in the running.

Members of the Hirschmann family, which set up the business in 1967, started to look for a buyer after failing to come to a decision about who should run the business.

The performance of the Swiss airline is thought to have improved over the past year, with its 2002 Ebitda expected to be around $70m, against $66m in 2001.