Mobeus Lands Another Exit
Image provided by former portfolio company, Image Source (www.imagesource.com)
Mobeus Equity Partners (“Mobeus”) has sold the major operating subsidiary of portfolio company British International Helicopter Services (“BIH”) to Patriot Aerospace Group (“Patriot”) in the latest phase of an asset disposal process which has now generated a return of c. £6 million to Mobeus advised VCTs, approximately 2x the original investment cost.
Mobeus backed the secondary MBO of BIH, a leading independent provider of helicopter services to civilian and military markets, from 3i in 2006. Headquartered in Sherborne, Dorset, BIH held long-term Royal Navy and MOD contracts out of several locations in the UK and RAF Mount Pleasant in the Falkland Islands, in addition to providing oil and gas exploration support work.
In recent years, BIH had faced challenging economic conditions, notably a continuous decline in passenger numbers on its scheduled helicopter passenger service between Penzance and the Isles of Scilly. This trading deterioration necessitated a change of strategy by management in order to protect stakeholder value and employment by disposal of its long –term contracts to acquirers intending to expand their presence in military service provision. In August 2012, the company announced the closure of the Isles of Scilly route and the Penzance heliport was subsequently sold for redevelopment, enabling all of the original bank debt to be repaid. In May 2013, BIH sold its major operating subsidiary to Patriot enabling repayment in full of all institutional borrowings and delivering an overall 2x return to the Mobeus advised VCTs. The deal has made Patriot the largest British owned helicopter company in the UK.
Mike Walker, Partner, comments: “BIH is an excellent example of a committed management team reacting to a deteriorating trading environment, adapting its strategy and working extremely hard to produce an outcome which has delivered a good return to stakeholders and preserved employment in a sale to a significant UK operator. We are delighted with the achievement of the team in very difficult circumstances.”
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