BULLISH & LOOKING
As it nears its one-year anniversary, the merged Piedmont-Hawthorne takes an aggressive posture
BY John F. Infanger, Editorial Director
PHOENIX — "It's sort of like selling airplanes," explains Dean Harton, CEO of Piedmont-Hawthorne Aviation, regarding his company's expansion activities. "If you aren't in some sort of conversations with half a dozen (FBO prospects), the chance of ever getting one deal purchased is pretty slim. So, we're actively talking."
In 1998, Piedmont Aviation, Hawthorne Aviation, and American Beechcraft of Leesburg, VA, merged to form Piedmont-Hawthorne. It was the coming together of two very similar companies with very traditional Southeastern aviation histories. Piedmont, based in Winston-Salem, NC, was a chain of fixed base operations and once owned an airline. Hawthorne, based in Charleston, SC, segued out of the full-service FBO and aircraft sales arenas after the mid-1980s, focusing on fueling operations, property development, and airport management. The relative new kid on the block, American Beechcraft, was primarily an aircraft sales outlet for Raytheon, an affiliation Piedmont carried as well. As of press time, the company touted 24 locations.
"It's a fair thing to say that the companies had a very similar culture, if you look at Piedmont and Hawthorne," says Harton. "But if you look inside the company, you see that Hawthorne over the years had moved toward strictly FBO-related services; we didn't fly airplanes, didn't have avionics, not much maintenance. And, we'd moved toward airport management.
"Piedmont had always been very strong in technical services as well as aircraft sales. American Beechcraft brought with it the Raytheon territory from South Carolina to Northern Virginia. So, now, the Raytheon territory runs from South Carolina to New York.
"The merger put their FBOs into our (Hawthorne's) FBO chain, but it gave us an expanded capability in terms of maintenance, aircraft operations, and other things."
One other key element of the merger and future growth is it is being backed financially by the Carlyle Group, a Washington investment merchant bank, according to Harton. It is, in essence, the money behind the moves. "We were well-capitalized. There was a lot of equity put into the deal. We don't have 18 layers of debt. We've got senior debt and equity; that's all. It's a nice position to be in," explains Harton.
Together, these players have formed a venture that is bullish about growth and its role in an aftermarket which is in the midst of major consolidation. Harton discussed future prospects for this emerging — yet still relatively quiet — firm recently during the annual convention of the National Air Transportation Association in Phoenix.
Solidifying the Core Company
As the lead paragraph illustrates, this is a company determined to remain on the move. However, after the initial merger, the continual exploration of new opportunities was inadvertently hampering the consolidation of what had already been merged, according to Harton. It's the reason he moved from an interim-CEO role to being the head of Piedmont-Hawthorne full time.
"My role in it," explains Harton, "was going to be strictly taking it from the $175-180 million revenue base that we had when we put it all together, and essentially trying to double or triple it through acquisitions, development efforts, joint ventures, and all the things that you do.
"We got involved in some other opportunities in late ’98 that would have changed the complexion of the company. By January, the opportunities hadn't materialized, and we realized we hadn't begun to assimilate the organizations which by then had been a single company for some six months."
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