New York, June 20, 2005 – LAWFUEL – The Law News Network – White & Case LLP announced that it has advised Aviation Capital Group Corp. in its completed $2.65 billion acquisition of Bellevue, WA-based Boullioun Aviation Services from German bank WestLB AG.
The Firm advised Aviation Capital Group (ACG) on all aspects of the transaction, including the acquisition, financing, various tax and regulatory matters around the world and the Export Credit Agencies negotiations in Europe. The transaction included, among other things, the acquisition of 102 commercial aircraft, 11 Airbus airplanes currently on order, various management contracts and other assets of Boullioun Aviation Services.
Newport Beach, California-based Aviation Capital Group is a subsidiary of Pacific LifeCorp., the parent company of Pacific Life Insurance Co. It decided to acquire Boullioun, an aircraft leasing company, to help solidify its spot as one of the top five aircraft operating lessors in the world.
“This transaction was one of the most complex I’ve seen in twenty-five years of practice,” said M&A lawyer Tony Kahn, who led the White & Case team advising ACG. “It began with the bidding process, which started in the fall of 2004, and involved diligence with respect to over 100 aircraft leases to approximately 45 airlines around the world and a thorough analysis of Boullion’s existing securitization transaction. The bidding process pitted ACG against a number of industry giants and involved a simultaneous negotiation with ACG’s funding sources to negotiate the relevant terms sheet with prospective lenders.”
The financing utilized by ACG was an important factor in ACG’s ability to submit a bid that was accepted by West LB over many competing bids. The credit facility involved many of the same structural and security issues present in a securitization transaction (including the creation of a bankruptcy remote borrower trust, true sale and non-consolidation opinions, lessee consents and local counsel opinions). Simultaneously with the closing of the transaction, existing ECA loan facilities for certain Boullioun aircraft were modified to enable them to remain in effect and additional ACG-owned aircraft were contributed to the borrower trust.
White & Case aircraft finance partner Mike Smith said: “The requirement that the many different pieces of the financing and the acquisition all occur simultaneously put enormous pressure on the completion of the deal. If even one small piece of the multi-faceted financing arrangements was not in place, it could have jeopardized the entire closing.”
Noting some of the unusual complexities that arose, Kahn added: “For example, a hydraulic problem with an aircraft leased to an Australian carrier led to an unexpected grounding of a plane in Darwin, Australia, that could have led to a significant tax problem. Fortunately, the aircraft was repaired and got airborne with less than 15 minutes to spare.”
WestLB has owned Boullioun since 2001, when it purchased Boullioun from Deutsche Bank. White & Case represented Deutsche Bank on that sale.
Deutsche Bank Securities acted as the financial advisor to ACG. Deutsche Bank, UBS and HSH Nordbank are providing funding for the acquisition.
White & Case partners advising Aviation Capital Group: Anthony Kahn, David Joyce, Mike Smith, Sylvia Chin and John Lillis (New York); Thomas McDonald (Paris).
About White & Case
White & Case LLP is a leading global law firm with 1,900 lawyers practicing in 38 offices in 25 countries. Global Counsel consistently ranks White & Case among the top global law firms.
As one of the most active law firms in the world in M&A transactions, White & Case has taken the lead in devising creative deal structures, designing acquisition programs and planning and implementing strategies for both acquirers and potential acquisition targets in domestic and cross-border transactions. These transactions often involve global due diligence and regulatory approvals, particularly from competition authorities. In Thomson Financial’s 2004 year-end league table summary of legal advisor activity, W&C ranked 2nd with 280 successfully completed deals.