KWM helps client reap double its investment in frequent flyer program

The $2bn deal comes five years after the stake was bought with the help of the firm

KWM helps client reap double its investment in frequent flyer program

King & Wood Mallesons (KWM) has helped a client reap double its investment in Virgin Australia’s rewards program, Velocity Frequent Flyer.

KWM advised Affinity Equity Partners, which sold the 35% stake it bought in 2014. Clayton Utz advised Virgin Australia on retaking full control of the rewards program, with a team headed by corporate partner Rory Moriarty, who was supported by special counsel Hugh Brolsma.

The exact financial details of the deal were not disclosed by KWM, but reports say that Velocity was valued at $2bn in the most recent deal.

KWM also advised Affinity when it purchased the stake for $335m for a valuation of about $960m. The most recent enterprise value means that KWM has counselled its client as it more than doubled its initial investment in the frequent flyer program.

The KWM team that advised in the divestment was headed by partner Mark McNamara and Alex Elser, who also advised on the 2014 acquisition.

KWM also said that partner Yuen-Yee Cho, assisted by senior associate Dan Flanagan, also advised Velocity on its recent debt financing. Cho also acted in Affinity’s acquisition of the Velocity stake in 2014.

“The Velocity Frequent Flyer Program is one of the leading Australian loyalty programs with almost 10 million members. In partnership with Virgin Australia, the Affinity team has participated in a period of rapid growth and success for the Velocity business. We wish Virgin Australia every success in continuing to grow Velocity,” McNamara said.

The work continues KWM’s relationship with Affinity, which it recently advised on its successful exit of TEG, which owns live events giant Ticketek, in what was reported as a $1.3bn deal. KWM, with a team headed by McNamara, counselled Affinity when it bought Nine Live, then owner of Ticketek, in a $640m deal in 2015.

Corrs Chambers Westgarth was on the other side of the table in the recent TEG acquisition, acting for Silver Lake Partners.

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