Easyjet completes Go deal

Budget airline operator Easyjet has paid a total of £374m for the 3i-backed airline.

UK private equity firm 3i has completed the rapid exit of low cost airline Go after Easyjet agreed to pay a total of £374m for the firm acquired by 3i last year. The price represents an enterprise value of £257.6m, after taking into account £116.4m of net cash on the Go balance sheet as at 31 March 2002.

The sale of Go is seen as one of the most successful exits for 3i in its long history. The £374m sale is slightly below analyst estimations of £400m, but still represents a massive return on the £110m paid for the firm in August 2001.

The deal has been completed without the support of Go's management, particularly chief executive Barbara Cassani, who has said that the future of Go 'would be best served' by an initial public offering that would allow it to maintain its independence rather than it being taken over in a trade sale by its rivals.

In a statement issued today, Cassani nevertheless described the deal as a 'tremendous compliment’ to the Go management’s performance since starting up four years ago.' It has been reported that the sale to Easyjet will make millionaires of more than 20 of Go’s management, who received a 22.5 per cent stake as part of the MBO last year.

Go is a European low-cost scheduled passenger airline, providing services from London Stansted Airport, Bristol International Airport and East Midlands Airport on short-haul and medium-haul routes within Europe. The airline flew 4.3 million passengers generating revenue of £233.7m and profits before tax of £17m.

The majority of Go's destinations are not currently serviced by easyJet but are destinations, which easyJet has had under consideration as possible future destinations. Easyjet estimates that the enlarged group will operate 81 routes, serving 35 airports and 32 destinations during summer 2002.