Deal to purchase Columbia Helicopters canceled

The Bristow Group paid Columbia a $20 million fee in order to terminate the acquisition agreement

Columbia BV-107
Columbia helicopter, N192CH, at Custer, SD July 31, 2011. Photo by Bill Gabbert.

The $560 million deal that the Bristow Group had to purchase Columbia Helicopters has been cancelled, the two companies announced Monday.

As required in the agreement Bristow paid $20 million to Columbia as a termination fee.

Columbia’s CH-47D helicopters with 2,800-gallon internal water tanks or external buckets are frequently seen over wildfires assisting firefighters on the ground.

Bristow had hoped that merging the two companies would open opportunities for their underemployed Airbus H225s to compete for military contracts using Columbia’s U.S. Department of Defense Commercial Airlift Review Board certificate. Columbia’s ships may have found work in the 10 countries in which Bristow maintains air operator certificates.

The plan was for Columbia to 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.

Bristow’s stock price dropped sharply both when the purchase agreement was announced the week of November 5 and again Monday when the termination of the purchase was revealed, losing 87 percent in the three months since disclosing the planned acquisition.

Bristow has not filed as required their final financial results for the quarter that ended December 31, 2018, and released only preliminary figures, explaining that since March 31, 2018 they have not have adequate monitoring control processes in place.

Thomas C. Knudson, the Chairman of the Board of Directors of Bristow, stated, “The decision to enter into a mutual termination of the purchase agreement was based on a number of developments following the entry into the agreement, which led both Bristow and Columbia to conclude that it was not possible to combine the two companies at this time. We continue to value our relationship with Columbia and look forward to having the opportunity to work together in the future.”

Steve Bandy, the President and Chief Executive Officer of Columbia, stated, “We continue to believe in the potential for collaboration between Bristow and Columbia, and the companies are actively considering mutually beneficial opportunities to work together.”

Thanks and a tip of the hat go out to Tom. Typos or errors, report them HERE.

Columbia Helicopters to be acquired by the Bristow Group

internal water tank Columbia CH-47D
Columbia CH-47D Chinook at the HAI HELI-EXPO 2017 conference in Dallas in March, 2017. The helicopter has an internal water tank for firefighting. Columbia photo.

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.

internal water tank Columbia CH-47D
A 2,800-gallon internal water tank being loaded into a Columbia CH-47D Chinook. Screen grab from a Columbia video.

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 helicopter
A Bristow helicopter, an Airbus EC 225 LP, registered in Norway. Screengrab from Bristow video.

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.

Bristow stock price
Bristow stock price, November 6, 2018 through January 16, 2019. Yahoo.

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.
Typos or errors, report them HERE.

News from the Aerial Firefighting conference, Part One

Above: the Air Tractor display at the Aerial Firefighting conference.

Here are a few notes that I scribbled in a notebook at the Aerial Firefighting conference in Sacramento this week. This is Part One — I will post Part Two later.


Air Tractor
Mike Schoenau, an Air Tractor dealer out of Tulare, CA, said a new single engine air tanker is being flight tested now. The model name is AT-1002 and will hold up to 1,000 gallons. You will be able to purchase one for yourself for about $2.5 Million.

Fire Boss
Fire BossThe Bureau of Land Management has not released their list of SEATs on contract this year, many of which will be the amphibious Fire Boss, a variant of the Air Tractor 802. Fire Boss doesn’t know if they will be converting the new AT-1002 1,000-gallon SEAT to use floats.

10 Tanker

Rick Hatton, 10 Tanker
RIck Hatton of 10 Tanker Air Carrier.

Their fourth converted DC-10, Tanker 914, will be ready to fight fire this summer. Rick Hatton, the President and CEO of  10 Tanker Air Carrier, said their approval by the Interagency Airtanker Board came to the end of its six-year term, so they retook the grid test in December. Their three DC-10s averaged about 300 hours on fires in 2017, which is more than usual.

I got into a long detailed conversation with Mr. Hatton about how their retardant delivery system can maintain a constant flow, adjusting for the amount of retardant in the tank, drop height, and speed. It usually drops at 150 knots and 200 feet.

Hours per CL-415
As we reported yesterday, Shawna Legarza, the USFS Director of Fire and Aviation, said the two CL-415 scooping air tankers that were on USFS contract in 2017 each had over 400 hours of fire flight time. Due to a reduction in the firefighting budget, the two scoopers had to be cut this year from the exclusive use list. At least a couple are still on a CWN contract, but they may or may not be available if the USFS Calls them When Needed.

Columbia
Columbia HelicoptersKeith Saylor, Columbia’s Director of Commercial Operations, said the company will have three Type 1 helicopters, CH-47 Chinooks, on exclusive use contract this year. Two have internal tanks and one will use an external bucket.

Conair
ConairShawn Bethel, Conair’s Director, International Business Development, said the external tank on the Q400 can be removed in about three hours by 9 to 12 workers. They recently received a contract to supply six Q400’s to France’s Securite Civile (Department of Civil Defense and Emergency Preparedness).

The Q400 MR can carry up to 10,000 liters (2,600 gallons) of water or retardant. In addition to the nine S-2’s and two Q-400’s, France also has twelve CL-415’s and 40 helicopters.