PROOF Acquisition Corp I (PACI) to Combine with Volato in $261M Deal
by Nicholas Alan Clayton on 2023-08-02 at 11:26am

PROOF (NYSE:PACI) has entered into a definitive agreement to combine with private aviation company Volato at an enterprise value of $261.1 million, or 2.7x its 2022 revenue.

Atlanta-based Volato has developed a fleet of private aircraft and operates a fractional ownership and charter jet network based out of regional airports.

The combined company is expected to trade on the NYSE once the deal is completed in 2023.

Transaction Overview

PROOF has an estimated $67.3 million in its current trust and the two sides plan to supplement this with $30 million to $60 million to be raised in a preferred financing round. PROOF’s sponsor already invested $10 million into Volato in a Series A that closed in July.

Volato has $7.9 million in existing cash on its balance sheet and expects to expand that to $37.9 million through the deal after footing $10 million in transaction expenses.

PROOF has offered to utilize up to 50% of its 6,900,000 promote shares in incentives to secure non-redemption agreements or other equity financing facilities towards covering its $35 million minimum cash condition.


Assuming no redemptions, existing Volato shareholders would retain a 64% stake in the company while public PROOF shareholders would take 23%. Should the company succeed in raising $30 million more in a preferred offering, then this and the $10 million Series A would represent a 13% stake in the company.

Both the company and sponsor are subject to a six-month lock-up.

Quick Takes: SPAC watchers can add one more to the tally of membership-based private plane companies launching SPAC deals – five of which have now been announced since early 2021.

As discussed with last month’s deal in this vein – Revelstone’s (NASDAQ:RCAC) pending tie-up with Set Jet – the performance of this particular kind of de-SPAC remains something of an unknown.

The nearest comparable companies that have completed SPAC transactions recently are charter jet e-booker Wheels Up (NYSE:UP), heli-taxi company Blade (NASDAQ:BLDE) and private hanger operator Sky Harbor (NYSE:SKYH). All three have struggled to reach profitability since completing their deals, which has led to a turbulent ride for their stocks on the public market.

Volato is both more scaled and somewhat more diversified than many of its cohorts in the private jet membership space. It generated $96 million in revenue in 2022 and currently ranks as the sixth most active player among fractional jet operators by flight hours.

It is rapidly gaining on its legacy competitors as well. All but one of those who rank higher than Volato in market share are 20+ years older than it, and the company has made these strides through a mix of organic and inorganic means.

In March 2022, it acquired 25-year-old private aviation player Gulf Coast Aviation. It operates out of Houston and added to Volato’s existing core fleet of 18 HondaJet aircraft operating out of airports in Atlanta, Baltimore, Houston, San Diego and two locations in Florida.

It currently has in orders for 23 more of these aircraft and in Volato’s illustrative model, it stands to generate $32.4 million in revenue and $5.6 million in EBITDA from each over a five-year contract with customers. This model has not yet fully established, however.

Part of what makes those economics work is recurring revenue from software that Volato is rolling out this quarter and an insider program it launched in March. In general, the company hopes to move away from revenue from selling whole aircrafts to fractions of them, which dominated its 2022 revenue mix.

Instead, it generated $16.9 million in what it deems as recurring revenue in the first half of 2023, which made up over half of its $30.7 million in revenue overall. Its definition of recurring is somewhat broad, however, encompassing maintenance, management fees, fuel and revenue from aircraft usage.

Those latter two factors may wind up being less consistent than the maintenance and management subscriptions, but nonetheless, these amounts were also much higher than the $5.6 million it generated from those services in the same period of 2022.

While recurring revenue certainly has its benefits, the company may miss the dollars it used to rake in from aircraft sales, which accounted for $67.6 million, or 70% of its 2022 revenue.

The parties’ materials do not state whether or when Volato might reach profitability, but this is likely to be the biggest question for the company as soon as it is reporting financials as a public company.

On a revenue basis, this deal values Volato at 3.2x the revenue from its last four quarters. Volato’s close peers, meanwhile trade at a highly broad range. With deep losses over the past year, Wheels Up is currently trading at 0.01x its revenue over the past 12 reported months, while Blade trades at about 1x and SkyHarbor is trading at 109x.

Click here for the full investor presentation.


  • Company
    • BTIG, LLC is serving as a financial advisor.
    • Womble Bond & Dickinson LLP is serving as legal advisor.
  • SPAC
    • Steptoe & Johnson LLP is serving as legal advisor.
    • Lowenstein Sandler LLP is serving as legal advisor.
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