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· Posted on
February 21, 2024

Virgin Australia is back in the black and might list on the ASX to celebrate

Virgin Australia's CEO says the airline has returned to profitability and is considering listing on the ASX.

What's the key learning?

  • Virgin Australia took a bit of a turn when COVID hit but PE firm Bain Capital took it over in a $573 million deal
  • Virgin Australia has now returned to profitability and is expecting to list on the ASX
  • Private equity companies like Bain Capital exist to take over struggling or undervalued businesses - and sell or list them for a profit.

👉 Background: Virgin Australia is the Aussie subsidiary of Virgin. Ya know, part of the same family as Virgin Active gyms and Virgin Galactic.

👉 What happened: When COVID hit… things at Virgin Oz took a bit of a turn. Like a went-into-voluntary-administration turn. But private equity group Bain Capital swooped in to rescue it, buying the airline for around $573 million.

👉 What else: A few years later... it looks like Virgin Australia is back in the black! The company’s CEO said the airline returned to profitability and is even considering listing on the ASX as early as next year!

What's the key learning?

💡Private equity companies like Bain Capital exist to take over struggling or undervalued businesses. Once they takeover a company, their aim is to increase its performance or profitability, and then sell it off at a much greater value.

💡 To achieve that profit at the end, private equity firms generally follow a three-step process. First, there's the acquisition. Then the business renovation, which involves restructuring, layoffs, merging/closing divisions... you name it.

💡Lastly, the firm looks to either sell the company to another investor... or take it public. And it looks like Bain's chosen the public route!

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