‘Different deals need different capital sources’
2021, for many in the helicopter industry, has been a year of consolidation. As well as very good performance on the existing fleet, leasing services company Lobo Leasing also announced a management buy-out (MBO). CEO Bill Wolf and chief operating officer Dan Roberts are now whole owners of the Ireland-based outfit.
One of the major benefits of this, Roberts tells Helicopter Investor, is that it will open up Lobo to a wide range of investors. “Different deals need different capital sources,” said Roberts.
“To be responsive to all transactions, we need to be working with a broad range of investors. So, by not having one controlling entity, we’re able to work with different investors and be more responsive to the kind of deals in the market.”
Senior management at PDG Helicopters completed a £20m MBO backed by private equity firm LDC in 2015.
What are some of the big opportunities in the industry? Although there are a limited number of deals happening every year, Roberts said there are always new deals to be done in utility and EMS as the fleet gets older. “I don’t see a lot of growth in the oil and gas fleet, based on where the world is headed.”
However, there remains the possibility of trading between leasing companies. Lobo’s fleet primarily does oil and gas, search and rescue and utility missions.
Roberts said the renewable energy sector is an opportunity for growth, but it is limited in size. “You need small helicopters on the wind farms. There’s not going to be hundreds of helicopters needed to manage them. There is going to be moderate growth in the sector.”
Lobo is also looking into electric vertical aircraft. While Roberts is confident that electric vertical take-off and landing (eVTOL) vehicles will not replace helicopters entirely, he is excited about their prospects. “They might be used in transportation of parts out to oil rigs or in EMS,” he said. “It is very exciting and there’s some interesting applications for it, but it’s a long way off. And it’s capability to completely replace what helicopters are doing is limited.”
His company is working with eVTOL maker Orca Aerospace to establish operations in the EMS sector. “We’re helping them to talk to EMS operators, establish their requirements to make sure the final product is exactly what’s needed by the market.”
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Overall, Roberts and Lobo are optimistic for next year. The lessor has managed to broaden its investor base and is in talks with a range of investors interested in helicopters in different ways.
“We’ve done different transactions with investors and proved the concept and next year will be very exciting. There’s a lot of capital out there that is looking for yield. Interest rates are still very low. Asset-based investments that deliver a decent return on investment are hard to come by. And so, we’re seeing a lot of interest and demand for these kind of helicopter transactions,” said Roberts.