Bombardier has closed the sale of its fractional ownership business, Flexjet, to a newly-created company called by the same name, the company announced.
The new company is funded by a group led by Directional Aviation Capital, the company said Thursday.
Bombardier announced the transaction in September for $185 million.
But with purchase price adjustments, the price is now estimated at $195 million, including the assumption of an estimated $70 million of customer advances by the buyer, Bombardier said.
The transaction has received government and regulatory approval.
With the closing, Flexjet’s firm order for 115 Bombardier business aircraft valued at about $2.4 billion, is now confirmed, the company said.
The order includes 25 Learjet 75s, 60 Learjet 85s, 20 Challenger 350s and 10 Challenger 605 jets. It also includes options for another 150 planes.
If all the options are exercised, the order will have a total value of about $5.6 billion, based on 2013 prices.
The actual impact to Bombardier’s bottom line will likely be lower, however. Companies typically give deep discounts off list prices for large orders.
Directional Aviation is an Ohio-based investment firm that already owns fractional ownership company Flight Options, along with multiple other private business aviation companies.
Flexjet, based in Richardson, Texas, is one of North America’s largest fractional ownership companies. NetJets, owned by Warren Buffett’s Berkshire Hathaway, is the largest.
The agreement to sell Flexjet will allow Bombardier to focus on its core manufacturing operations, the company and analysts have noted.
Bombardier formed the Flexjet division in 1995 to support the expansion of business jet travel and for market penetration of its Learjet and Challenger business jet products, analysts have said.
Flexjet operates Bombardier aircraft exclusively and has been Bombardier’s biggest customer. It has taken delivery of more than 225 Bombardier business jets since the company began 18 years ago.
With Flexjet, customers buy a fraction of a plane then pay monthly management fees and pay charges for flight time under a five-year contract. Flexjet also offers jet cards that come with a certain amount of annual flight hours, charter services and aircraft management.