Story ID: 060SheltairTampaAINAug16EditedByAY_NM
Chain Buys Indie: Inside an FBO Deal
By: Curt Epstein
Caption: What actually goes on when a chain acquires an independent location?
Word Count: 1143
With the trend of consolidation continuing apace in the FBO industry, it seems no company is invulnerable to acquisition, as evidenced by Sheltair’s recent acquisition of Tampa International Jet Center (TIJC), a formerly fiercely independent, stand-alone location.

The FBO, one of two service providers at Florida’s Tampa International Airport (TPA), has consistently been one of the most highly regarded facilities in the country since it opened more than a decade ago. Long coveted by the big chains, the location attracted even more interest recently, according to former company president Phillip Botana, who remains with Sheltair as a senior vice president. “We’ve been approached by almost everybody in the business at some point or another in recent years to consider selling,” he noted. “Before the announcement and the closing, I’ve probably been called in this last year by more investment groups interested in getting into being a consolidator in this industry than ever before.”

Coupled with those eager suitors was the looming threat posed by Signature Flight Support, which in its February purchase of Landmark Aviation acquired the other FBO at TPA, one of the now 200 locations in its network. “Obviously the landscape has been changing, particularly in recent years with the fairly rapid consolidation by the bigger chains,” Botana told AIN. “I think we’ve come to realize over time that it is more and more difficult to compete with the marketing prowess of some of these big chains, particularly when they are on your airport.”

Despite the FBO’s continued success, Botana and TIJC’s owner still felt the financial jitters that continue to dog the economy and the industry. “We had the uncertainties of a presidential election and we’re seven years into a not-so-great recovery from a big recession, but there aren’t many recoveries that last much longer than seven years, so we started looking at what the next five to ten years might hold for us in terms of having a successful business and being able to compete.”
Seller Set the Tone
Once they made the decision to sell, TIJC’s leaders realized they would be able to decide who would acquire the FBO, and established a list of criteria for possible buyers, including a strong presence in the market and the state, as well as a company that the airport authority would perceive as a good tenant. “We built a nice little business here with a good reputation, and we would prefer that that culture didn’t get torn apart through an acquisition,” noted Botana. “That was important to us.” Also of concern was the future for the company’s employees.

Botana recalled an earlier conversation he had with Sheltair founder, chairman and CEO Jerry Holland, who had expressed interest in acquiring the location. The Fort Lauderdale-based company operates 10 FBOs in the state, so it met the first criterion. “The more I looked at his company, the more I realized it checked all the boxes for us,” he recalled. “We felt it was a good fit and decided that if we could put a deal together that made sense for both companies, we should probably consider doing that.”

Word of the deal began leaking out, initially causing unease among TIJC’s staff, and two months before the announcement Botana called a company-wide meeting. “I figured it was better that they heard what was happening from us rather than the rumor mill, which is usually only about 50 percent right,” he said.

“It was a lot of anxiety to begin with for the team members,” said Julie Silberman, the FBO’s former customer service director, who has since joined the chain’s marketing division. “We kept reassuring them that we’re all in this together. We’ve been through so much together over the years that we’re going to continue to be as tight knit as we are and I think that really helped a lot.”

Once the deal was finalized, Tom Craft, Sheltair’s regional vice president, and his staff held a meeting with the location’s employees, introducing them to Sheltair. “The biggest thing that concerned almost all of the employees was their benefits,” Craft told AIN. “It’s scary when you are with a company, you build up this big base, you’re proud of it and then here comes another company and it’s just going to take it over. I understand that.” Sheltair then met with each employee to assure everyone that his or her position was secure. Indeed, the only former TIJC staffer who wasn’t retained was the in-house accountant, whose work was no longer required because Sheltair has a centralized bookkeeping system.

Overall, Botana lauded the company for its efforts to welcome his staff. “Our people felt good about becoming part of Sheltair and not feeling like there was anything they lost,” he said, adding that their prospects for advancement have since improved greatly from the 27 positions at TIJC to the entire Sheltair network. Sheltair also brings an internal management training program to the equation.

It was not only the Tampa staff that needed reassurance but the customers as well. Botana and Silberman generated lists of the location’s top customers and contacted them directly to explain the transition and address questions or concerns. Sheltair’s real estate team followed up that contact, committing to honor all existing tenant agreements, and offering network benefits. So far, according to Craft, no tenants have left, and Sheltair has pledged to follow through on TIJC’s planned construction of a 32,000-sq-ft hangar, which will bring the location up to 140,000 sq ft of hangarage upon completion.

In terms of changes, Sheltair has largely adopted an “if it ain’t broke, don’t fix it” approach to the acquisition. “I think for the vast majority of people, almost nothing has changed other than the color of their uniforms and the way we handle the company name when we answer the phone,” said Botana, noting the synergies in the two companies’ operations and cultures. “They do things on a more centralized basis, so instead of carrying the invoices that need to be paid into an accounting person’s office to get the checks cut and processed, we have to put them in a FedEx envelope and send them to Fort Lauderdale to be paid.”

According to Sheltair COO Warren Kroppel, the transition went smoothly, with the integration of the two separate IT networks presenting the greatest challenge. “About a month after we had the acquisition, we had both our staffs sit down and we had an after-action review because there were some things we learned from them, and there were some things they learned from us.”