Helicopter Investor London 2020: A new ERA
Bristow and ERA are merging to form a dominant offshore operator, creating a safe and financially strong player with a presence in established and emerging offshore markets, ERA President and CEO Chris Bradshaw told delegates at Helicopter Investor London 2020.
Whilst the two operators have been in talks to merge for many years, the time was never right, Bradshaw said. But following Bristow’s emergence from Chapter 11 with a strong balance sheet – plus the increased need for consolidation in the large oil and gas helicopter operators’ field – now was the “right time”, according to Bradshaw.
Both companies announced their intent to merge in January 2020 in an all-stock transaction. The combined company will take the name of Bristow, and trade shares on the New York Stock Exchange under the existing NYSE:ERA ticker symbol. The transaction is expected to close in the second half of 2020.
The combined company is expected to achieve revenues of $1.5bn and an adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of about $240m. It is expected to have a significant presence in offshore operations in the Americas, Nigeria, Norway, the UK and Australia.
“It is strength coming together with strength with our revenues,” Bradshaw told delegates at Helicopter Investor London 2020.
Crucial to offshore operations
When both fleets are combined, the new company will operate more than 300 aircraft and will be the world’s largest operator of S92s, AW189s and AW139s – all helicopter types crucial to offshore operations.
However, both operators are all too familiar with current helicopter oversupply and dwindling demand for offshore missions and are seeking to cut costs wherever they can – including those associated with their own fleets.
Bradshaw revealed the company’s intention to lease or sell the company’s fleet of Bell 412s and 212s, claiming they “have no real place in the operational outlook of the company”. It will also have a combined number of 60 Sikorsky S76s, which Bradshaw expects to contract over time.
‘Unnecessary corporate expenses’
But the biggest savings will come from cutting expenses. Bradshaw said that ERA and Bristow expect to eliminate $35m in costs relating to “unnecessary corporate expenses” following the merger.
As well as owning and operating a large helicopter fleet, ERA also leases its helicopters out when the demand for offshore operations is slack. Bradshaw assured the audience that, following the merger, ERA plans to continue its in-house leasing business.
“We like the combination of leasing and operating. If we can’t find a place for a helicopter in our own fleet, we can put it out to customers. Partnerships and leasing will continue to be a core part of our business going forward.”
Meanwhile, read Helicopter Investor’s summary of the first day at the conference here and the second day here.
Helicopter Investor’s London 2020 conference took place at the Royal Garden Hotel, London between 25th and 26th February.