|
Private equity firm buys CHC Helicopter
2008-02-22
A U.S. private equity fund will buy CHC Helicopter Corp. for 1.5 billion Canadian dollars ($1.48 billion) in what the companies described Friday as the largest oilfield services buyout ever. First Reserve Corp., a private equity firm that invests in energy companies, said CHC's board unanimously approved the all-cash deal. "This transaction will mark the beginning of an exciting new phase in CHC's history," CHC President and Chief Executive Sylvain Allard said in a conference call Friday. "I am delighted that First Reserve was able to recognize the value CHC has created over the years." Allard added that the deal will help the company "strengthen our position as the largest helicopter service company in the world." CHC flies people and equipment to oil and gas drilling locations. Shares of CHC soared nearly 40 percent, or $8.43, to $29.93 after the deal was announced. First Reserve, based in Greenwich, Conn., will pay 32.68 Canadian dollars ($32.30) per share for the company, a 49 percent premium to CHC's closing price on Thursday. First Reserve managing director Mark McComiskey said that while the value of the deal may seem high, he believes the business is worth it because of the rising price of oil and the company's strong position in the industry. "I think the company has had some hiccups recently that has forced the stock down. ... We see an enormous amount of upside in CHC's business," McComiskey said in an interview Friday. "CHC is the by far the best of the companies in the helicopter services sector because it is the largest and it's a global company. It's got a significant presence in every major growth basin for offshore oil and gas production in the world." In addition to $1.48 billion in cash, First Reserve will assume $1.5 billion in aircraft liabilities and about $789 million in debt. Allard will remain as CHC's chief executive, a position he has held since November 2004. The company will also remain based in Vancouver. "It's an interesting deal, and a very expensive deal," said Mike Mazar, an analyst with BMO Capital Markets. "There are a lot of positives in this business now and not a lot of competitors." The deal requires approval by shareholders and regulators including European aviation authorities and the Canada Transportation Agency. The company is hoping to close the deal by June.
| 
