Affinity Equity Partners snaps up one third stake in Virgin Australia’s loyalty program


download (6)Australia and Asia-focused Affinity Equity Partners has agreed to buy a 35 per cent stake of airline Virgin Australia‘s frequent flyer program Velocity.

Virgin Australia said it will keep the remaining 65 per cent stake as part of the deal, which the company announced in its 2014 financial year results.

The sale is expected to increase Velocity’s cash balance by $336m and gives it an enterprise value of $960m.

Velocity will stay under the Virgin Australia Group and new Velocity board and will keep the right to appoint the chairman.

Virgin said Affinity’s input would help the expand Velocity, give access to additional capital and resources and increase focus on its business performance.

The report stated, “Affinity brings a wealth of experience in driving rapid and sustainable growth across a diverse range of businesses”

The impact of the share sale is “expected to be relatively neutral from a group profit and loss perspective for the financial year 2015,” said Virgin.

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