PAI’s Swissport to land fourth bolt-on

A former portfolio company of now-defunct Candover, Swissport is already the world’s largest provider of aviation ground services.

Swissport, a company owned by Paris-based PAI Partners, has entered exclusive negotiations to acquire Servisair. 

The deal would be Swissport’s fourth acquisition since PAI Partners took over the business, following its recent investments in Costa Rica’s InterAiport Services, Scandinavia Airlines Systems and Flightcare’s Belgium and Spanish units. 

Servisair is currently owned by Derichebourg, a French corporate and community services group. The transaction, for which no financial details were released, remains subject to legal and regulatory clearance. 

Swissport is the world’s largest provider of ground services to the aviation sector, handling functions such as check-in and baggage services for around 118 million passengers. It is also active in the freight business, with 3.5 million tonnes of cargo managed a year on behalf of nearly 650 corporate clients, and counts around 40,000 employees. 

By targeting Servisair, the company is set to absorb one of its major rivals: the UK-based business is the fourth largest aircraft ground handing company, providing services to around 106 million passengers and shifting 645,000 tons of cargo annually. Acquiring the company, which is present in 20 countries, would also allow Swissport to expand its geographical footprint. 

Swissport lost control of its Ukraine subsidiary last March, after Ukraine International Airlines and its main shareholder launched a legal challenge against the division. The company claims that the attack, and the subsequent court decision, was held on dubious grounds. 

A former subsidiary of Swiss flag carrier Swissair, Swissport was bought by Candover for CHF580 (€469 million, $618 million) in 2002. The business was then acquired by Spanish infrastructure conglomerate Ferrovial in 2005 for €336 million, which generated a 2.6x return for now-defunct Candover. Debt reduction efforts then led Ferovial to divest the unit to PAI in 2011. 

Swissport is held in PAI’s Fund V, which reached its final close on €5.4 billion in 2008 but was later downsized to €2.7 billion after a management reshuffle triggered a key-man clause.  The firm has been accelerating realisations over the last 18 months, concomitantly to raising its Fund VI with a target of €3 billion.