Bristow and Era Helicopters are merging
Two of the largest operators in the offshore helicopter market, Bristow and ERA Helicopters have agreed to merge in an all-stock transaction.
Bristow’s shareholders will own 77% of the merged firm’s equity and ERA’s 23%. The transaction is expected to close in the second half of 2020.
If the merger succeeds the new company will be called Bristow and is expected to have about $1.5bn in annual sales and adjusted EBITDA of $240m. It will have more than 300 aircraft and will be the world’s largest operator of S92s, AW189s and AW139s.
“Bristow and Era share complementary cultures built on an unwavering commitment to safety and quality through experienced, well-trained trained pilots, mechanics, engineers and support staff,” says Don Miller, president and CEO of Bristow. “Merging these two companies will further build on that culture to create an even stronger, more-integrated industry leader.”
This announcement comes almost a year after Bristow cancelled a similar agreement to combine with US heavy-lift operator Columbia Helicopters. That abortive agreement was made in November 2018 and later cancelled in February 2019. The transaction was valued at $560m.
Chris Bradshaw, President and CEO of ERA, said: “We believe this merger will create substantial value for the stakeholders of both companies. The identified cost synergies are significant and, combined with the strong pro forma balance sheet and absence of capital commitments, support robust free cash flow generation.”
Ducera Partners and Houlihan Lokey are financial advisors to Bristow. Kirkland & Ellis, Baker Botts and Bracewell are Bristow’s legal counsel. Centerview Partners is serving as exclusive financial advisor to ERA, and Milbank is serving as ERA’s legal counsel.
Figures courtesy of Era Helicopters
The past few years have seen several major operators enter Chapter 11 bankruptcy protection, including Bristow. Since CHC filed for Chapter 11 in 2016, the prevailing view in the industry is that the oiland-gas helicopter market needs consolidation in order to meet the shrinking demand.
Whilst most operators, including PHI, CHC and Bristow, emerged from Chapter 11 with restructured balance sheets, there are apparently still too many aircraft for oil and gas missions.
- Bristow cancels 22 H175 order with Airbus – Janruary 2020
- Bristow Emerges from Chapter 11 – November 2019
- Bristow recieves court approval for reorganisation plan – October 2019
- Bristow announces $75m tender offer – August 2019
- Bristow finalizes $385 million debt for equity swap – July 2019
- Bristow signs $150 million DIP commitment – July 2019
- Bristow signs new offshore contract amidst Chapter 11 proceedings – June 2019
- Bristow files for Chapter 11 protection – May 2019