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Bristow and Era to Merge, Forming a Larger, More Diverse and Financially Stronger Global Industry Leader

  • All-stock transaction creates financially stronger, publicly traded company with a significant presence in key geographic regions
  • Combined company will offer broader range of world-class, efficient aviation solutions through enhanced fleet size and diversity, providing better solutions for new and existing oil and gas customers and governmental agencies
  • Expected to achieve pro forma annual revenues of approximately $1.5 billion and run-rate adjusted EBITDA of approximately $240 million, including at least $35 million in annual cost synergies
  • The combined company will maintain a strong balance sheet with robust free cash flow to facilitate continued deleveraging and returns to shareholders

HOUSTON, Jan. 24, 2020 (GLOBE NEWSWIRE) -- Bristow Group Inc. (“Bristow”) and Era Group Inc. (NYSE:ERA) (“Era”) announced today that they entered into a definitive agreement to combine the two companies in an all-stock transaction, creating a financially stronger company with enhanced size and diversification.

The combined company, which will be named Bristow, will strengthen its global leadership position with significant operations throughout the Americas, Nigeria, Norway, the United Kingdom and Australia for offshore aviation transportation and search and rescue solutions. The new organization will offer a broader range of world-class, efficient solutions through enhanced fleet size and diversity, continuing to invest in new technology and safety features to meet the evolving needs of new and existing oil and gas customers and governmental agencies.

“We believe this merger will create substantial value for the stakeholders of both companies,” said Chris Bradshaw, President and CEO of Era. “The identified cost synergies are significant and, combined with the strong pro forma balance sheet and absence of capital commitments, support robust free cash flow generation. This merger achieves more efficient absorption of the significant fixed costs required to run an air carrier and better positions the combined company to manage industry challenges.”

“Bristow and Era share complementary cultures built on an unwavering commitment to safety and quality through experienced, well-trained trained pilots, mechanics, engineers and support staff,” said L. Don Miller, President and CEO of Bristow. “Merging these two companies will further build on that culture to create an even stronger, more integrated industry leader.”

Highly Compelling Strategic Rationale

Enhances Global Leadership with Significant Presence in Key Geographic Regions and End-Markets:

  • Significant operations throughout the Americas, Nigeria, Norway, the United Kingdom and Australia
  • Global leader in offshore oil and gas transportation, search and rescue and aircraft support services to government and civil organizations, with significant revenues and cash flow generated from government services contracts

Increases Fleet Size and Diversity:

  • Combined fleet of more than 300 of the industry’s most modern aircraft with the latest generation of technology and safety features
  • Creates the world’s largest operator of S92, AW189 and AW139 model helicopters
  • Combined fleet will be predominantly owned (>80%), with attractive lease rates on the balance of the fleet

Creates Financially Stronger Company:

  • Expected to achieve pro forma annual revenues of approximately $1.5 billion and run-rate adjusted EBITDA of approximately $240 million
  • Substantial and highly achievable cost synergies with an annualized saving of at least $35 million through the elimination of redundant corporate expenses and the realization of enhanced operational efficiencies
  • Maintains a strong balance sheet (~2.5x net leverage), supported by a large combined cash balance (over $250 million expected at closing)
  • $112.5 million upsized ABL facility, with a robust free cash flow profile to facilitate continued deleveraging and returns to shareholders

Governance and Management
Following completion of the transaction, the combined company will be headquartered in Houston, Texas. Chris Bradshaw, President and CEO of Era, will become President and CEO of the combined company. The senior management team will be named at a future date.

The combined company will have a nine-member Board of Directors, including seven members from Bristow and two members from Era, including the CEO. The Chairman and Vice-Chairman of the Board of Directors will be appointed by Bristow.

Transaction Structure
The transaction will be structured as a reverse triangular merger whereby Era will issue shares to Bristow stockholders. Era (NYSE:ERA) shares will continue to trade on the NYSE.

Under the terms of the agreement, which was unanimously approved by the Board of Directors of both companies, Bristow shareholders would own 77% of the equity of the new company and Era shareholders would own 23%.

The transaction is expected to close in the second half of 2020, following receipt of required regulatory approvals and satisfaction of other customary closing conditions, including approval by Bristow’s and Era’s stockholders. The merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Share Repurchase Plan
Era also announced today that, in connection with entry into the merger agreement, its Board of Directors has authorized a special stock repurchase program that would allow for the purchase of up to $10 million of its common stock from time to time and subject to market conditions on the open market or in privately negotiated transactions. The special repurchase program will commence as soon as practicable and will end upon the mailing of the joint proxy statement/prospectus for the merger. Era also noted that it intends to provide the market with periodic updates of the results of the repurchase program. Era’s previously announced repurchase program will be suspended until the closing of the merger.   

Attractive Financial Profile

 

Era Flash

 

Pro Forma 

 

Q4’19

FY2019E

 

2019E

Run-Rate 

Revenue

~$60mm

~$225mm

 

~$1.5bn

~$1.5bn

Adj. EBITDA

~$13mm

~$37mm

 

~$165mm

~$240mm

Adj. EBITDA Margin

~22%

~16%

 

~11%

~16%

FCF(1)

~$11mm

~$35mm

 

––

~$140mm

Total Debt

~$160mm

 

~$805mm(3)

Cash

~$120mm

 

~$310mm(3)

Net Debt

~$40mm

 

~$495mm(3)

Net Leverage

~1.1x

 

~2.5x(2)

~2.0x

Notes: All financial projections for Era and the PF combined company reflect estimates and are subject to revision. See below for cautionary statement regarding forward looking statements.

  1. Free cash flow is a non-GAAP financial measure and is defined as cash flow from operating activities (net of interest) less capital expenditures.

  2. Reflects 2019E combined Adjusted EBITDA including run-rate synergies of $35mm.

  3. Estimated combined debt and cash balances as of 12/31/19, before transaction impacts.

Advisors
Ducera Partners and Houlihan Lokey are serving as financial advisors to Bristow, and Kirkland & Ellis LLP, Baker Botts LLP and Bracewell LLP are serving as Bristow’s legal counsel. Centerview Partners LLC is serving as exclusive financial advisor to Era, and Milbank LLP is serving as Era’s legal counsel.

Conference Call
Era’s management will conduct a conference call starting at 10 a.m. ET (9 a.m. CT) on Friday, January 24, 2020 to review the announced transaction. This release and the most recent investor slide presentation will be available in the investor relations area of Era’s website at www.erahelicopters.com. The conference call can be accessed as follows:

Investors may participate in the call by phone. Dial toll-free 800-367-2403 for U.S. domestic callers or 334-777-6978 for international callers, at least 10 minutes before the call, using the access/confirmation code 1966586. A telephone replay will be available through February 7, 2020, dial toll-free 888-203-1112 for U.S. domestic callers or 719-457-0820 for international callers and use the access/confirmation code above. 

ABOUT BRISTOW GROUP
Bristow is the world’s leading provider of offshore oil and gas transportation, search and rescue (SAR) and aircraft support services to government and civil organizations worldwide. Bristow’s strategically located global fleet supports operations in the North Sea, Nigeria and the U.S. Gulf of Mexico; as well as in most of the other major offshore oil and gas producing regions of the world, including Australia, Brazil, Canada, Guyana and Trinidad. Bristow provides SAR services to the private sector worldwide and to the public sector for all of the United Kingdom on behalf of the Maritime and Coastguard Agency. To learn more, visit our website at www.bristowgroup.com.

ABOUT ERA GROUP
Era is one of the largest helicopter operators in the world and the longest serving helicopter transport operator in the U.S. In addition to servicing its U.S. customers, Era provides helicopters and related services to customers and third-party helicopter operators in other countries, including Brazil, Colombia, India, Mexico, Spain, and Suriname. Era’s helicopters are primarily used to transport personnel to, from and between offshore oil and gas production platforms, drilling rigs and other installations. In addition, Era’s helicopters are used to perform emergency response services, firefighting, utility, VIP transport and other services. Era also provides a variety of operating lease solutions and technical fleet support to third party operators. To learn more, visit our website at www.erahelicopters.com





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