Sun Country sold to NY Investment Group
According to the Star Tribune, the Minnesota owners of Sun Country Airlines have sold the company to Apollo Global Management, a New York based investment group, for an undisclosed sum. Apollo specializes in leveraged buyout transactions and purchases of distressed assets. I hate to say it but I predicted the sale back in August.
What We Know
- Davis family has sold Sun Country to a NY based investment firm
- Headquarters will remain in Eagan, MN
- Recently named CEO & President Jude Bricker will stay onboard
- Deal is expected to close in Q1 2018
The New York investment firm will continue to implement the ultra low cost carrier (ULCC) model that Sun Country announced last fall. These cost cutting measures will continue for a year or two in order to boost revenue, and then once the valuations meet the investment firm’s goals, the airline will likely be sold off to Southwest or a similar carrier which flies Sun Country’s Boeing 737-700 & 737-800 aircraft (JetBlue flies A320s). Another possibility is that Apollo could inject capital into Sun Country and grow it to a size that would better compete with other ULCC’s, but this would take time and cash. Either way there are more changes on the way.