Making a Chain

MAKING A CHAIN Florida firm continues growth via acquisition with ASI Orlando FBO by John F. Infanger STUART, FL - In January, officials who own the mini-chain of fixed base operations, Boca Aviation and Galaxy Aviation, announced the...


MAKING A CHAIN

Florida firm continues growth via acquisition with ASI Orlando FBO

by John F. Infanger

STUART, FL - In January, officials who own the mini-chain of fixed base operations, Boca Aviation and Galaxy Aviation, announced the acquisition of the Aircraft Service International FBO at Orlando International Airport. The move is the next step in what they say is development of a small chain of "strategic fit" companies that eventually will have them looking outside the state of Florida, to the Northeast.

Explains chief operating officer Mark Wantshouse, who is based at Boca Raton, "We're headed in a growth acquisition direction, but we tend to look for a certain profile.

"Our four FBO profiles are the high rent, corporate-type of market, and they're very strong locations. We've passed on other locations that just did not meet the profile.

"We are definitely looking for a fifth, sixth, and more FBOs, and our goal is to grow into a significant operation. Geographically, we're not limiting ourselves to the state of Florida, it just happens that that's where our concentration has been and where the operations have been available."

Wantshouse says that, because of its primary customer base, he sees the company as a north-south corridor chain, and a natural expansion target is the Northeast U.S.

The COO has been involved in the recent acquisitions and says the downturn in the economy is beginning to have an effect on the FBO acquisition market, which in the latter 1990s was not only vibrant but also saw many outside investors enter the game. "We're now starting to see it turn more toward a buyer's market; it's not there yet, but it has gone that direction in the past nine months," explains Wantshouse.

"Prior to that, it was definitely a seller's market, and there were a lot of people looking to expand, a lot of dollars being put out there and high prices being paid for FBOs. We see the changing market as something that will help us on our fifth acquisition."

OWNERSHIP

David Smith & Mark Wantshouse David Smith, left, and Mark Wantshouse

From the outside, having two different names for FBOs seems odd, if not confusing. This is particularly so for a company which prides itself on its marketing capabilities. However, it has to do with ownership.

Primary investor Martin Green-berg is a tax attorney, certified public accountant, and holder of properties across the U.S. He entered the FBO arena 22 years ago with the acquisition of Boca Aviation, transforming an "underdeveloped" FBO into a modern complex on a state-owned airport. The minority owner at Boca is Miami Beach attorney Paul Steinberg who, unlike Greenberg, had no interest in further FBO acquisitions.

Wantshouse, meanwhile, started at Boca Aviation in 1984 as a line technician during high school, and by 1987 had been promoted to president to run the operation. He is also a minority owner in Galaxy Aviation.

FOUR LOCATIONS

The purchase of the ASI Orlando FBO puts Galaxy Aviation on its second air carrier service airport. It purchased the FBO from Signature Flight Support, with which it will compete for both general aviation and airline servicing business.

Its other commercial service location is at West Palm Beach, where it competes with Signature and Jet Aviation and already has air carrier contracts. It acquired that facility from Signature as well, and has been housed in the former Butler Aviation-Signature FBO. However, it was expected to move into a new terminal in February. Signature is now located in the former International Aviation-Bizjet FBO.

Explains Wantshouse, "Both Signature purchases were the results of mandates from the Department of Justice for Signature to divest" as a result of the super-chain's acquisitions of other facilities. "Our Palm Beach acquisition took a lot of time but went very smoothly; the Orlando acquisition has gone well."

The other fixed base operation is at Stuart, some 40 miles north of West Palm Beach and where interviews for this article were conducted. It competes with the Stuart Jet Center at the general aviation airport, and began operations out of a trailer after the acquisition of a small FBO in 1995.

"At Stuart," says Wantshouse, "it pumped 1,800 gallons of fuel a year when we purchased it. Presently, we are at just over 40 percent of the market share - about a million gallons."

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