• Targets can have up to USD 250m EV
• Acquired by Acorn Capital on 26 February

Pan Am Flight Academy has its sights on add-on acquisitions, said Greg Agnew, a partner at its new private equity owner, Acorn Capital Management.

The Miami-based provider of flight simulator-based training will look at platforms of all sizes that are complementary in terms of customers and the aircraft platforms on which pilots are trained, he said.

Pan Am Flight Academy would do very small acquisitions if they brought a particular geographic focus, customer set or type of training. But targets could be as large as Acorn’s largest platforms, which have an enterprise value of USD 250m, he said.

While Agnew said Miami is “a tremendous aviation market,” targets in complementary geographies could be very attractive. Pan Am would also consider acquiring platforms focused on different aircraft types, such as business jets and regional jets, he said.

Acorn, a middle-market private equity firm that invests exclusively in the aerospace and defense sector, acquired Pan Am Flight Academy for undisclosed terms on 26 February.

Pan Am Flight Academy, founded in 1980 as part of Pan American World Airways, was spun out as an independent training academy after the airline filed for bankruptcy in 1991, Agnew said.

The company has made acquisitions before, acquiring Airline Career Academy in January 2013.

At the time, it was under the ownership of private equity firm American Capital Strategies, which invested in the company as part of a management buyout in 2006. ANA Holdings, the holding company of All Nippon Airways, later acquired it in July 2013.

Calling the Pan Am brand iconic, Agnew said, “We think the name is a tremendous intangible asset here.”

The deal came through direct talks without financial advisors. Acorn and Ed Wegel, who Acorn named as the new CEO of the company, had known Pan Am Academy for quite some time. “We had on-and-off discussions over a couple of years,” he said.

In addition to M&A, Pan Am will seek organic growth based on acquiring new simulators for training, Agnew said.

About half the market is captive training schools. They are part of major airlines that have their own simulators and do their own training, he said. Pan Am specializes in small and midsize passenger and cargo planes and works with airlines that don’t have their own captive simulator capability. The company is also valuable because it has simulators for multiple aircraft types produced by Boeing and Airbus.

Agnew called flight training a multibillion-dollar addressable market with high barriers to entry and “a very solid growth rate.” The market is highly fragmented with many players having fewer than 10 simulators. He did not want to name competitors.

Agnew said he welcomes ideas about targets.

Acorn’s law firm was Hartzog Conger and Cason, while Fafinski Mark & Johnson advised the sellers. Debt financing was provided by City National Bank. Acorn also partnered with Andrew Flesch of CapitalView Investment Partners on the transaction, according to the deal announcement.