Avianca Holdings S.A. (NYSE: AVH) (BVC: PFAVH), the parent company for Colombia’s flagship airline, and private equity firm Advent International, today announced that they have inked a deal in which Advent will acquire a 30% of the shares of LifeMiles B.V, the subsidiary of Avianca Holdings S.A. that operates the LifeMiles loyalty program. Avianca will receive US$ $343.7 million for the stake and will maintain a 70% shareholding interest in LifeMiles B.V.
LifeMiles is one of the largest loyalty coalition programs in Latin America with more than 6 million members as of March 31, 2015. A recipient of five Freddie Awards, the program is an important partner for many large banks as well as an increasing network of retailers in South America.
Avianca Holdings S.A. and Advent plan to further develop and grow LifeMiles’
coalition loyalty program, strengthen its presence in Colombia, Peru and Central America and expand its services into new growth markets in Latin America and abroad
Fabio Villegas, Chief Executive Officer of Avianca stated, “We are happy to welcome Advent as our new partner in LifeMiles B.V. This transaction concludes a thorough evaluation process which allowed us to choose Advent as our ideal partner. Their solid understanding of the loyalty industry and verticals in which LifeMiles operates makes them an excellent long-term partner for the Company. We believe Advent has the right team to help us ensure LifeMiles reaches its full potential, and we look forward to working with them to capture additional opportunities that will benefit customers, commercial partners, and our shareholders.”
Mario Malta, a Managing Director in Advent’s São Paulo office, added, “We believe LifeMiles will benefit from the fundamental trends in Colombia and other key markets, including continued growth in consumer spending, travel and credit card use. We look forward to sharing our retail, and financial services sector expertise and leveraging our network to accelerate the Company’s growth.”
As of December 31, 2014, LifeMiles reported relationships with more than 200 commercial partners, 71 mileage agreements with financial institutions, and 28 co-branded credit and debit cards. It has developed a retail coalition that allows retailers to reward their customers with miles and facilitates the in-store redemption of miles for products sold by participating retailers.
Mauricio Salgar, a Managing Director in Advent’s Bogotá office, stated, “LifeMiles is a strongly positioned business supported by its partnership with Avianca with an innovative set of products and services that appeal to partners and consumers. We are pleased to partner with Avianca Holdings S.A. in supporting LifeMiles´ talented management team as they pursue growth objectives for the business.”
Advent has been investing in sectors complementary to LifeMiles and its commercial partners for over 20 years. The firm has done 65 investments in the business and financial services sector and 65 investments in the retail, consumer and leisure sector across 20 countries worldwide.
In connection with this transaction Avianca was supported by Morgan Stanley & Co. LLC as financial advisor and Simpson Thacher & Bartlett LLP as legal advisor. Deutsche Bank Securities Inc. served as financial advisor and Baker & McKenzie served as legal advisor to Advent.