November 16, 2018
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Bristow Group has signed an agreement to combine with privately-held Columbia Helicopters for US$560 million. Columbia will be designated as an unrestricted subsidiary under the Columbia name and AOC.
Bristow expects the transaction to strengthen its operational and financial profile by delivering adjusted EBITDA and cash flow accretion, reducing consolidated net leverage, diversifying the combined company's fleet and customer base, expanding its market – especially in the US government sector – and producing incremental revenue opportunities.
Founded in 1957 by Wes Lematta and headquartered in Aurora, Oregon, Columbia is a leader in heavy lift helicopter operations and specialises in MRO services. Its markets include defence, firefighting, onshore oil and gas, infrastructure and forestry. For the 12 months ended September 30, 2018, Columbia recorded revenues of approximately $281 million and adjusted EBITDA of approximately $117 million. Its fleet comprises 21 tandem rotor Vertol 107 and Chinook CH-234/CH-47D and it also has additional non-operational airframes available for deployment. Together, the companies will have 304 operating aircraft.
CEO Jonathan E Baliff comments: "We share a long-standing, proven commitment to safety and Columbia's specialised heavy-lift capabilities are highly complementary to Bristow's offshore capabilities. We therefore see significant opportunity to leverage the combined companies' fleet, MRO capabilities and certificates to expand our addressable market opportunities globally.
"Just as importantly, we believe we will be able to utilise our UK SAR expertise to build our combined business in the growing US government and industrial end-markets, where Columbia has deep experience."
Columbia president and CEO Steve Bandy adds: "Like Bristow, we have built our business through a commitment to operational excellence that fosters long-term relationships with customers and employees. Together with Bristow, we will have an incredible platform to serve our global customer base. On behalf of everyone at Columbia, we are looking forward to partnering with Bristow to redefine the industrial aviation industry."
Under the terms of the agreement, Bristow will acquire 100 per cent of the equity interests of Columbia for $560 million from the Lematta family and current management. The transaction will be funded through a combination of debt, convertible debt, newly-issued common shares to the Lematta family and existing Columbia management and cash from Bristow's balance sheet. The transaction is expected to close prior to December 31, 2018, and Bristow will remain headquartered in Houston, Texas, while Columbia will remain headquartered in Aurora.
Bristow has also announced the upcoming retirement of CEO Baliff. Vice chairman of the board of directors Thomas Amonett has been appointed to serve as the interim president of the company during the CEO transition process, working closely with chairman Thomas Knudson. The corporate governance and nominating committee of the board of directors is leading the search for a new CEO, with input from the board of directors and the support of an executive search firm. Baliff will focus on integration planning for the Columbia Helicopters acquisition.
Knudson states: "On behalf of the entire company, I want to thank Jonathan for his contributions over the past eight years, including his advancement of our long-term strategy to diversify and expand our capabilities for existing and new customers. During Jonathan's tenure, we positioned Bristow to become the world's premier, diversified industrial aviation services company, and I am confident Tom's substantial operational and leadership expertise will allow him to skillfully guide the team as we embark on this next phase of growth.
"While we are now a more effective, efficient organisation, we still have significant work to do to reduce costs and improve our financial position. The Columbia acquisition will strengthen our financial position, broaden our industrial aviation capabilities, and continue to diversify and expand our fleet and customer base."
Baliff adds: "I am honoured to have led Bristow, and I am proud of what our teams have accomplished since 2010, including improving our Target Zero safety culture, strengthening our capital allocation and operational processes and diversifying our aviation services. I believe the company is well positioned to seize opportunities in the growing market for industrial aviation. I am committed to executing a smooth leadership transition, and I look forward to serving as a representative of Bristow on the Columbia board of directors."