Columbia Helicopters has reached an agreement to be acquired by a company that primarily provides offshore helicopter transportation for the oil and gas industry. The Bristow Group has agreed to purchase Columbia for $492 million in cash and $68 million in Bristow stock.
The deal was reached in November, 2018 but Columbia has until April 9, 2019 to close the transaction.
“Columbia will continue to provide wildland fire suppression services after the transaction closes,” according to Santiago Crespo, VP of Business Development and Marketing. “Columbia has been adding employees for the past few years and expects to continue to do so after the transaction closes.”
Based in Aurora, Oregon, Columbia concentrates on heavy lift operations for industry, the military, and wildland firefighting agencies with their fleet of 21 Vertol 107s and CH-234/CH-47D Chinooks. The company has 860 employees and recently began using 2,800-gallon internal water tanks in some of its Chinooks.
Both of the companies have been around since the 1950s.
Bristow provides helicopter transportation and aircraft support services to government and civil organizations worldwide with their fleet of 233 helicopters and 78 fixed wing aircraft . The company has major transportation operations in the North Sea, Nigeria, the U.S. Gulf of Mexico, and in most of the other major offshore oil and gas producing regions of the world, including Australia, Brazil, Canada, Russia, and Trinidad. Bristow provides search and rescue services for all of the U.K. on behalf of the Maritime and Coastguard Agency. In March, 2018 the company had 4,058 people on their payroll, including about 100 in their Houston headquarters.
Bristow hopes that merging the companies would open opportunities for their currently underemployed Airbus H225s to compete for military contracts using Columbia’s U.S. Department of Defense Commercial Airlift Review Board certificate. And Columbia’s ships may find work in some of the 10 countries in which Bristow maintains air operator certificates.
Columbia would be a wholly owned subsidiary operating as a separate company with its own board and management structure, and would remain in Oregon, retaining the Columbia name and the aircrafts’ livery.
Since the deal was announced the week of November 5, 2018 Bristow’s stock price has fallen 73 percent, closing at $3.28 Wednesday.
Activist investor Global Value Investment Corp. (GVIC) has some concerns with the acquisition and last week issued an open letter to the Chairman of the Board of Directors of Bristow Group Inc.
Under the proposed financing, GVIC estimates that about 33 million shares of Bristow’s common stock will be issued in order to consummate the Columbia acquisition. Compared to Bristow’s November 2, 2018 outstanding share count of 35.8 million, this represents dilution of approximately 93%. GVIC believes that any benefits that may result from the Columbia acquisition are greatly outweighed by this dilution.
Bristow announced a $144.2 million net loss for the September 2018 quarter. With the downturn in oil production and other market forces the company has considered canceling their existing orders for 23 additional large helicopters.
OregonLive reported that if the deal to acquire Columbia falls through, the agreement signed in November requires Bristow to pay a $20 million termination fee.
Thanks and a tip of the hat go out to Tom.
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