Deal of the Week: American Beacon Advisors

After the recent collapse of Aloha Airlines and ATA Airlines—both of which were previously rescued from bankruptcy by private investors—buyout pros had to be wondering if any investment in the airline industry made sense.

They got their answer last week when Pharos Capital and TPG Capital agreed to buy American Beacon Advisors, the asset management subsidiary of AMR Corp., the parent of American Airlines.

The deal is valued at about $480 million, with AMR retaining a minority ownership position. It’s a good deal for AMR because it allows it to focus on its core business, and it’s a good deal for Pharos and TPG because they get an investment advisory services provider with a large customer—and they avoid getting directly into the struggling airline business.

Expect to see other carriers spinning out non-core assets, creating good opportunities for private equity investors. —Dan Primack and Lawrence Aragon