Gibralt buys Canadian airline(2)

Canadian Gibralt Capital has entered the popular aerospace sector with its acquisition of a majority stake in Toronto-based Skyservice Airlines.

Vancouver-based private equity firm Gibralt Capital Corporation has purchased a majority stake in Skyservice Airlines for an undisclosed amount, propelling the firm into the popular aviation industry.

Skyservice is a Toronto-based airline that runs charters for packaged tours to Canada, the US, Mexico, the Caribbean and Europe. The airline also runs a business jet charter and air ambulance services, neither of which was included in the sale to Gibralt.

Robert Giguere, Skyservice’s president and chief operating officer, said Gibralt will help the airline grow its traditional business as well as its more recently developed third-party aircraft maintenance and aviation services businesses.

No changes in senior management, operations or staffing levels are planned, Giguere said.

Gibralt made the investment through Second City Capital Partners, a $100 million (€73 million) fund that targets investments of between $5 million and $15 million in Canada and the Western US.

The firm’s previous investments include US gas pipeline contractor Rockford Corporation and Canadian airbag inflator filter maker Greening Donald.

Though Skyservice is the firm’s first investment in the aerospace industry, this summer has been marked by several high profile airline deals. TPG won a protracted bidding war with AirTran for the $450 million acquisition of Midwest in August, and in late July Oak Hill Capital Partners bought global air cargo provider Southern Air for an undisclosed amount.

Several high profile airline deals have also collapsed recently. In May a Macquarie-led consortium withdrew its A$11.1 billion ($9 billion, €6.7 billion) bid for Australian airline Qantas, after failing to secure 50 percent shareholder approval. In July, an auction for Italian airline Alitalia fell apart after potential buyers failed to submit bids. One of the potential buyers, a consortium including TPG and Italian bank Mediobanca, cited inability to comply with government-imposed restrictions on the deal.

TPG is also said to be mulling a €3.4 billion offer for Spanish airline Iberia. The Sunday Telegraph, however, recently quoted a source saying the price of the deal could come down due to the rising cost of debt financing and the possibility of falling air fares if the economy turns.