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American Capital acquires flight school

The publicly-traded buyout and mezzanine fund has acquired the flight simulation and training center of the former Pan Am Airways for $58m.

American Capital Strategies has acquired the commercial division, air traffic division and certain region division assets of Pan Am International Flight Academy for $58 million (€46 million).

The investment, which comes in the form of a senior term A loan, senior subordinated debt and series A preferred equity, also included the flight academy’s management and private equity firm Dimeling, Schreiber & Park.

Founded in 1992, the flight academy grew out of the flight simulation and training center for the former Pan Am Airways. It provides training for pilots, air traffic controllers, and other airline crew for commercial passenger airlines and air freight carriers. Its customers are chiefly regional carriers in North and South America. The company is based in Miami, Florida but also has training facilities in Memphis, Tennessee, Minneapolis, Minnesota, Las Vegas, Nevada and Cincinnati, Ohio.

“Pan Am International Flight Academy’s simulators are in steady demand, a result of the industry-wide trend of second- and third-tier airlines outsourcing their flight simulation,” American Capital principal Myung Yi said in a statement.

American Capital, which is also providing a revolving credit facility for the company, has been especially active lately. The firm has invested $4.6 billion in the last 12 months, $2.5 billion year to date and $90 million quarter to date. The firm is a publicly traded buyout and mezzanine shop with capital resources of approximately $8.4 billion. Since its August 1997 IPO, the firm’s shareholders have seen a total return of 398 percent, and an annualized return of 20 percent.

In February the firm jumped into venture capital investing, hiring venture vets Andy Fillat and Tony Abate to head its new effort.