Bristow has acquired a minority stake in Cougar Helicopters
The Bristow Group and Cougar Helicopters have jointly announced that Bristow has entered into a definitive agreement with Cougar’s parent VIH Aviation Group Ltd. (“VIHAG”) and various VIHAG affiliates to acquire a minority interest in Cougar and certain aircraft and facilities used by Cougar in its operations.
Cougar’s operations are primarily focused on serving the offshore oil and gas industry off Canada’s Atlantic coast and in the Arctic.
Bristow’s investment will be $250 million with a three-year earn-out of up to an additional $40 million based upon Cougar achieving agreed performance targets. The transaction is expected to be completed in the fourth quarter of calendar year 2012, subject to the approval by the Canadian Transportation Agency and the completion of an interim $250 million, 364-day term loan facility.
The operating assets being purchased include eight Sikorsky S-92 helicopters and helicopter passenger, maintenance and SAR facilities located in St. John’s, Newfoundland and Labrador and Halifax, Nova Scotia. The purchased aircraft and facilities will be leased by Bristow to Cougar on a long-term basis.
Kenneth Norie, the owner of VIHAG who will continue to serve as chairman and CEO of Cougar, said: “We are very pleased to have Bristow as a significant investor in Cougar, as we have similar corporate cultures and core values, especially our commitment to safety. I believe that this relationship will enhance the services Cougar provides to our customers and positions Cougar for the next phase of its growth.”
Cougar had CD$124 million of revenue in fiscal year 2011, and expects to grow significantly over time as this market continues to expand.
William Chiles, president and chief executive officer of Bristow, said: “This investment represents an excellent opportunity for Bristow to gain exposure to an attractive, dynamic and growing Canadian exploration and production market. We view Cougar as an exceptional operator, as we have previously worked successfully together and are culturally and operationally aligned with shared core values of safety, quality and service.”
Bristow intends to fund at closing the asset purchase and minority interest investment in Cougar from the proceeds of a new interim $250 million, 364-day term loan facility, with repayment of this term loan to be made from a combination of cash on hand, proceeds from future financings and cash flow from operations.
Chiles added: “The aircraft being acquired and leased back to Cougar are under contract to high quality customers, and provide the foundation for a financially attractive investment that is anticipated to be at least seven percent accretive annually to Bristow’s earnings per share, cash flow and Bristow Value Added.”