Erickson Air-Crane, Incorporated (“Erickson” or “the Company”) (NASDAQ: EAC) today announced that it has signed a definitive purchase agreement to acquire Air Amazonia Serviços Aeronauticos Ltda. (“Air Amazonia”), the aviation services division of HRT Participações em Petróleo S.A. (“HRT”), as well as a fleet of six aircraft and ground facilities. The Company expects the transaction to close in the third quarter, following the satisfaction of certain customary closing conditions. Terms of the deal, which were revised from those previously disclosed in a binding term sheet announced on March 7, 2013, are described below.
Udo Rieder, Chief Executive Officer of Erickson Air-Crane, Incorporated, commented, “We are very pleased to have reached agreement with HRT for the purchase of the aerial services business of HRT. We are pleased with the structure of the transaction and in particular, because we are able to fund the initial purchase price with our existing revolving credit facility and will release the $45 million cash held in escrow under the notes offering. This preserves the potential financial upside contemplated by the previous structure, without the higher capital outlay. We believe that the transaction is an excellent use of capital, will prove to be significantly and immediately accretive, and produce Adjusted EBITDA margins in line with our core business. This is a significant step in our strategy of continuing our expansion into the South American oil and gas market.”
Pursuant to our agreement, Erickson will pay $23.0 million at closing for the business, which includes a fully operational fleet of 6 rotary-wing aircraft of varying types and mission capabilities, and an additional $3.0 million within twelve months of closing as consideration for the achievement of certain milestones.
In conjunction with the acquisition, we will enter into a five year aerial services contract (including annual renewal options) with HRT to provide rotary-wing aircraft services to support their oil & gas activities in the Solimoes region. Erickson expects to service the contract with the 6 aircraft acquired from HRT in addition to deploying 2 currently idle aircraft from our fleet. The aerial services contract will provide Erickson with minimum revenue of $29 million per year.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts