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Why Shares of Aspirational Consumer Lifestyle Are Flying High Today

By Lou Whiteman - Feb 1, 2021 at 10:01AM

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The SPAC has a deal in place to get into the private aviation business.

What happened

Shares of Aspirational Consumer Lifestyle (ASPL) climbed 10% at the open Monday after the special purpose acquisition company (SPAC) announced a deal to merge with private aviation company Wheels Up.

So what

Wheels Up is a 7-year-old provider of small plane services, according to its website, that offers members access to private planes at a more affordable price. Wheels Up flew more than 150,000 passengers in 2020, utilizing its access to more than 1,500 owned, managed, and third-party partner aircraft.

Wheels Up also has a marketing partnership with Delta Air Lines.

Two planes flying towards each other.

Image source: Getty Images.

Aspirational Consumer Lifestyle is a SPAC launched by Ravi Thakran, a private equity investor and former managing partner at luxury brand LVMH.

The deal values Wheels Up at $2.1 billion, and should provide up to $790 million in cash proceeds to the business. That includes $240 million in cash held by the SPAC, and a $550 million private investment from a group of funds including T. Rowe Price, Fidelity, Franklin Advisors, Durable Capital, HG Vora Capital Management, Third Point, Luxor Capital, and Monashee.

The deal is expected to close in the second quarter, at which time Wheels Up would be listed on the New York Stock Exchange under the ticker UP.

Now what

In a statement this morning, Wheels Up CEO Kenny Dichter said, "We believe this will allow us to actualize our founding goal of democratizing private aviation, through our unique membership model, suite of products and benefits, and by bringing the shared economy to private aviation through our Wheels Up app."

Certainly, the transaction will provide a lot of growth capital for Wheels Up, and help the company sustain itself and be opportunistic at a time when much of the aviation industry is struggling.

But given the current excitement, and sky-high valuations, surrounding SPACs, and the uncertainty about how the travel industry will adapt once the pandemic subsides, investors would be wise not to rush on board until we learn more about the company and see how it navigates public markets for a quarter or two.

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