Prospect Capital Corporation has sold its investment in AirMall to Fraport AG Frankfurt Airport Services Worldwide. The transaction results in a gross 16.7% internal rate of return and 1.61x cash-on-cash return to Prospect.
AirMall, acquired by Prospect in July 2010, is a developer and manager of retail, food and beverage concessions at four US airports: Baltimore/Washington International Thurgood Marshall Airport (BWI); Boston Logan International Airport (BOS); Cleveland Hopkins International Airport (CLE); and Pittsburgh International Airport (PIT). Together, these four hubs serve a total of about 70 million passengers per year. AirMall currently oversees about 366,000 square feet of space in the passenger terminals at the four airports – with about 270 retail and food and beverage outlets operated by international, national, regional and local tenants. The company was established in 1991 at the Pittsburgh International Airport and is headquartered in Pittsburgh (www.airmallusa.com).
For the twelve month period ended June 30, 2014, AirMall generated total revenue and EBITDA of $49.1 million and $12.1 million, respectively. Since Prospect acquired AirMall in July 2010 the company has grown its last twelve month revenue and EBITDA by 17.3% and 19.5%, respectively.
“We applaud the managers of AirMall, who continue to optimize passenger revenue in AirMall’s airports,” said Richard Carratu, a Managing Director of Prospect Capital Management. “Prospect Capital is actively looking for new one-stop control and non-control investments with a yield-orientation across all industries.”
Prospect invests from $10 million to $75 million in private and micro-cap public businesses located in the US and Canada that have from $3 million to $30 million of EBITDA. Investment structures include: senior debt; unitranche debt; 2nd lien and mezzanine debt; and “one stop” debt and equity. The firm invests in an array of industries and is effectively industry agnostic. Prospect Capital is headquartered in New York (www.prospectstreet.com).
The buyer of AirMall, Fraport AG Frankfurt Airport Services Worldwide, is a global airport manager which had approximately €2.6 billion in revenue in 2013. The company is based in Frankfurt am Main, Germany (www.fraport.com).
“The retailing business at our Frankfurt home-base has always been a growth engine and we have repeated this success story consistently over the years at our other Group airports worldwide. With the acquisition of AirMall, we have established a promising platform for developing our US business in the future,” said Fraport AG’s executive board chairman Dr. Stefan Schulte.
2014 PEPD • Private Equity’s Leading News Magazine • 8-4-14