Air Serv, based in Atlanta, GA, is a global provider of outsourced services to commercial airlines, airports, and transportation companies. Air Serv offers a wide array of services that enable its airline and freight partners to serve their consumers in a more efficient and cost-effective manner. From detailing the interior of aircraft to assisting guests with special needs, Air Serv’s team members make sure that passengers, luggage, and freight enjoy a safe, clean, and timely journey. The company is an innovator in its industry through actively deploying mobile technology throughout its workforce to drive improved productivity and reduce service delivery costs for Air Serv’s customers.
Situation
Air Serv grew rapidly from its founding in 2002 and was working in 2010 to expand its business into the U.K. The company had recently won a major contract to provide services to London’s Heathrow Airport and needed working capital to launch its new U.K. operation. Additionally, management had plans to diversify its revenue by implementing its operating model in ancillary janitorial businesses and needed a partner that could help to finance future acquisitions.
Petra’s Role
In 2010 Petra made its initial investment in Air Serv, funding $3 million of preferred stock and $6 million of subordinated debt to provide working capital to support Air Serv’s organic growth. In 2011 Petra invested an additional $5 million of subordinated debt to fund an acquisition that expanded the business to non-airline janitorial services. Petra actively served on the board of directors and compensation committee of the company. Petra also assisted the company in expanding its senior debt facility and identified another acquisition opportunity for Air Serv’s management.
Results
Air Serv’s revenue grew at a 23% compound annual growth rate, reaching $300 million in revenue during Petra’s investment period, while EBITDA margins expanded with scale and the acquisition of a higher-margin business. In 2012 the board decided to seek liquidity at the request of a shareholder to meet the company’s need for additional capital to fuel the next stage of growth for the business. Petra introduced an investment bank to Air Serv to run a managed sale process targeting both financial and strategic buyers. In 2012 ABM Industries, a publicly traded building maintenance and facilities services company, signed a definitive agreement to acquire Air Serv for $158 million in cash. ABM combined Air Serv with its existing airline services division, creating a $650 million revenue business unit under the leadership of Air Serv management.