Private-equity firm First Reserve Corp. plans to acquire global offshore helicopter-service supplier CHC Helicopter Corp., Vancouver, B.C., (NYSE: FLI; Toronto: FLY-A; FLY-B) for an adjusted enterprise value of C$3.7 billion in cash.
The deal is believed to be the largest buyout in the oilfield-services industry. First Reserve will pay C$32.68 per Class A share and Class B share for a total of approximately C$1.5 billion. The price paid for the ordinary shares and the amount of debt were not disclosed. The deal is not contingent on the approval of holders of CHC’s 7.375% senior subordinated notes due 2014.
CHC can terminate the deal by paying a break fee of C$38.5 million. First Reserve can terminate by paying a break fee of C$61.4 million. First Reserve will finance the deal from fund equity and from a debt financing by Morgan Stanley International and affiliates.
The estate of Craig L. Dobbin holds 14%, 95% and 100%, respectively, of outstanding Class A, Class B and ordinary shares.
CHC chairman Mark Dobbin says, “I’m glad to see that First Reserve recognized the value that was created in CHC over the years…I’m also very pleased to see that First Reserve will carry on CHC’s legacy of entrepreneurship, as it builds upon CHC’s position as a world-class helicopter company.”
CHC president and chief executive Sylvain Allard adds, “This partnership will help us realize our growth potential. First Reserve is an investment company with deep knowledge of the energy industry and views CHC as a great investment platform.”
First Reserve managing director Mark McComiskey says, “CHC is an extraordinary company. The European and global leader in oil and gas and search-and-rescue helicopter services, with the world’s largest independent helicopter-support business, CHC has a worldwide footprint, the best safety record in the industry and a dynamic management team.”
Merrill Lynch Canada Inc. and Scotia Capital are financial advisors to CHC. The deal is expected to close in this quarter. CHC has aircraft in more than 30 countries.
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