Lehman, TPG invest $363m in private jet firm(4)

Private aviation company XOJET has obtained $363 million in debt and equity financing from Lehman Brothers Global Principal Strategies and TPG’s venture arm.

TPG Growth and Lehman Brothers Global Principal Strategies have supplied $363 million (€258 million) in financing for private jet company XOJET.

The two firms provided $143 million in debt and equity financing, while Lehman gave an additional $220 million for aircraft lease financing.

David Bonderman, founding partner of TPG, David Siegel, chairman and CEO of airline

Global demand for private jet travel continues to grow at more than three times the rate of the broader economy.

David Bonderman

catering company Gate Gourmet, a former TPG portfolio company, and William McGlashan, partner and managing director of TPG Growth, will join the XOJET board of directors.

“Global demand for private jet travel continues to grow more than three times the rate of the broader economy,” Bonderman said in a statement. “After studying this substantial $33 billion global industry, TPG concluded that XOJET’s model is well positioned to take advantage of growth opportunities by delivering top quality service cost-effectively.”

XOJET counts more than 500 executives, corporations and individuals as its clients, and offers leasing and on-demand aircraft options. The firm was founded in 2001, began flying in 2006, and has raised more than $540 million in financing to date.

TPG has a long history with – and large appetite for – aviation deals, though this is its first investment in private aviation. The buyout firm is perhaps best known for its turnaround of Continental Airlines in the mid 1990s, which brought the bankrupt airline back into the black and resulted in an 11-fold return for TPG. Most recently, TPG purchased US regional airline Midwest Air Group last month for roughly $450 million.