North America Private Credit Loan: Jeppesen ForeFlight’s US$4.2bn financing
Cruising altitude
In a year when geopolitical storms rattled nerves across global credit markets, the US$4.2bn private credit financing supporting Thoma Bravo’s acquisition of several units from Boeing’s digital aviation solutions business rose above the turbulence with unmistakable force. The transaction showcased private credit in its most confident, creative and indispensable state, setting a benchmark for large-scale direct lending in volatile times.
The transaction was also a debut performance for the long-awaited US$25bn Citigroup-Apollo direct lending partnership announced in September 2024. This marquee financing, backing the US$10.55bn purchase of the assets now known as Jeppesen ForeFlight, made an immediate statement.
Apollo was administrative agent, anchoring a package that comprised a US$4bn seven-year term loan and a US$200m seven-year revolving credit facility, with the term loan pricing at 475bp over SOFR. Apollo and Blackstone led commitments, joined by private credit heavyweights such as Blue Owl Capital, Ares Management, KKR, Oak Hill Advisors and Golub Capital.
The partnership with Citi gave Apollo an early look at the Jeppesen ForeFlight business, enabling the firm to put together a proposal that allowed greater leverage and ultimately increased the sale price, said Alexander Bavifard, managing director at Apollo.
"We were first to the market with an aggressive view on leverage, which helped the M&A process," Bavifard said. "With Apollo's very aggressive read, Citi was emboldened on the sellside process to be able to go out there and drive the valuation for the business as high as it could possibly go."
Earlier in the year, financing for such blue-chip aviation units would likely have sailed through the broadly syndicated loan market, said John McAuley, Citi’s head of debt capital markets in North America. But by March, jitters over US trade policy were creeping in. Then came "liberation day" on April 2 when president Donald Trump announced sweeping tariffs on most US imports. Markets plummeted, volatility spiked and several syndicated processes froze in their tracks.
Against that backdrop, the private credit bid became not merely attractive but essential.
“If it weren't for the private credit staple, we would have gotten to a point where the bids are all coming through, the M&A transaction is ready to be announced, and the financing isn't there,” McAuley said.
The certainty of execution, coupled with greater leverage and enhanced flexibility, made the private route the clear winner for Thoma Bravo. Citi’s decision to prepare a private credit option from the outset ensured the M&A and financing processes unfolded with remarkable smoothness, even in geopolitically charged conditions.
As McAuley put it, the private financing option didn't just support the deal, “it really blew away what the bank underwriting market was able to do".