Canadian Helicopters buys Helicopters NZ for C$120M

Canadian Helicopters buys Helicopters NZ for C$120M

13-Apr-2011 Source: Canadian Helicopters

Canadian Helicopters Group Inc. (TSX: CHL.A, CHL.B), the largest helicopter transportation services company operating in Canada, announced today that its wholly-owned subsidiary Canadian Helicopters Limited (“CHL”) has entered into a sale and purchase agreement to acquire the assets of Helicopters (N.Z.) Limited, including the shares of Helicopters (Australia) Pty Ltd and other active subsidiary companies, as well as the assets of Helicopter Nominees Limited (collectively “HNZ”) (the “Transaction”). The Transaction purchase price is NZ$160 million (approximately C$120 million), on a debt free and cash free basis, and is subject to customary adjustments.

HNZ is New Zealand’s largest and most diverse helicopter owner and operator with 55 years of operating history throughout New Zealand, Australia and Asia. Through the years, HNZ has built an enviable set of client relationships and experience through a focus on impeccable safety standards and service quality.

HNZ’s head office is in Nelson, New Zealand, and the company has 11 bases to support operations across New Zealand, Australia, Laos and Cambodia. HNZ also has a corporate office in Perth to support its significant Australian operations. HNZ has 181 employees, a modern fleet of 33 helicopters, and revenue of NZ$83 million (approximately C$62 million) and EBITDA of NZ$28 million (approximately C$21 million) for the twelve months ended December 31, 2010. As of June 30, 2010, HNZ’s 33 helicopters had an appraised value of NZ$137 million.

“We are very pleased with the acquisition of HNZ”, said Don Wall, President and Chief Executive Officer of Canadian Helicopters. “The acquisition of HNZ represents a transformational investment for CHL and in a part of the world that complements CHL’s activities in the northern hemisphere. Acquiring HNZ will assist in providing greater stability as it extends the arm of CHL’s existing operations in Canada, the United States and Afghanistan. HNZ has excellent people and a very strong brand particularly with respect to safe operations, and will be a significant part of CHL’s growth plan as we look to the future. Like CHL , HNZ operates in challenging environments and positions itself as providing “excellence in the extremes”. We look forward to supporting the employees in New Zealand, Australia and elsewhere in the region in continuing to provide “best in class” service.”

“HNZ has grown from a local New Zealand based company to an internationally respected operator involved in all aspects of helicopter operations. We welcome the opportunity to continue to maintain our high level of quality services and continue to grow and enhance the business for all stakeholders, including our clients and staff, in the future through Canadian Helicopters’ ownership” said HNZ’s CEO Brian McDonald.


Experienced and Capable Team

HNZ’s reputation is driven by an experienced management team with a wealth of experience in flight, engineering support and commercial operations. It is anticipated that HNZ’s entire team will continue to support the HNZ business following the closing of the Transaction.

Long Term Established Client Relationships

HNZ’s client base includes Shell Todd Oil Services, Australia Worldwide Exploration, OMV Maari Field, Origin Energy Resources, Rio Tinto, the US Department of Defence, the Australian National Aerial Firefighting Centre, ESSO, and National Antarctic programs, among others. HNZ has long standing relationships with these clients, including Shell Todd Oil Services for which it has been providing services for over 40 years.

High Quality Fleet of Helicopters

HNZ owns a modern fleet of 33 well maintained helicopters, including a number of twin engine helicopters that are equipped for HNZ’s offshore support operations.

Well Positioned for Growth

HNZ has existing relationships and demonstrated capabilities in strategic locations which provide an excellent platform to compete for contracts in Australia and other parts of the Asia Pacific region. In addition, as the largest and most diverse operator in New Zealand, HNZ is well positioned to capitalize on new opportunities in that country.

Counter Seasonal to CHL’s Business

CHL’s domestic flying operations are subject to predictable seasonal fluctuations due to variations in daylight hours and changes in weather conditions, with the highest domestic demand occurring from May to October. Because it is geographically located in the southern hemisphere, HNZ’s business will be counter seasonal to CHL’s. For example, HNZ’s Antarctic expedition and fire related services are provided from December to April, a period during which the demand for CHL’s services is at its lowest.

Opportunity for Operational and Cost Synergies

CHL believes that the Transaction will create a number of achievable synergies, including with respect to insurance costs and the seasonal movement of helicopters to maximize utilization.

Conservative Pro Forma Capital Structure

The Transaction will be funded with a combination of cash on hand and bank debt. CHL has significant financial flexibility as it has no debt and had C$43 million of cash on hand as of December 31, 2010. As such, CHL will continue to have a conservative capital structure following the closing of the Transaction.

Accretive to Earnings per Share and Free Cash Flow per Share

The Transaction is expected to be accretive to CHL’s earnings per share and free cash flow per share in the full year following the closing of the Transaction. CHL intends to maintain its current dividend policy following the closing of the Transaction.


The Transaction will be funded with a combination of cash on hand and bank debt. To finance the Transaction, CHL has secured a commitment from National Bank of Canada and Caisse centrale Desjardins for a revolving credit facility totaling C$125 million. The new credit facility will replace CHL’s existing revolving credit facility.


The Transaction is expected to close in the third quarter of the 2011 calendar year. The Transaction is subject to regulatory approvals and other customary closing conditions, including consent of the New Zealand Overseas Investment Office under the Overseas Investment Act 2005, and obtaining an Air Operating Certificate from the New Zealand Civil Aviation Authority.


Macquarie Capital acted as exclusive financial advisor to Canadian Helicopters. Legal advice was provided by McCarthy Tétrault LLP and Minter Ellison Rudd Watts. Canadian Helicopters was also advised by Ernst & Young LLP on due diligence and tax matters.


Canadian Helicopters will hold a conference call to discuss the Transaction on April 13, 2011 at 11:00 AM (ET). Interested parties can join the call by dialing 416-644-3423 (Toronto) or 877-974-0446 (toll free). If you are unable to call at this time, you may access a tape recording of the meeting by calling 416-640-1917 (local) or 877-289-8525 (toll free) followed by access code 4433753 followed by #. This tape recording will be available until April 20, 2011. Supporting documents with respect to the Transaction will be available on Canadian Helicopters’ website at


Through CHL, Canadian Helicopters Group Inc. is the largest helicopter transportation services company operating in Canada and one of the largest in the world based on the size of its fleet. From over 35 base locations across Canada, Canadian Helicopters provides helicopter services to a broad range of sectors, including infrastructure maintenance, utilities, oil and gas, mining, forestry, construction, and emergency medical services. In addition to helicopter transportation services, Canadian Helicopters operates two flight schools, provides third party repair and maintenance services in Canada and the United States and provides military support in Afghanistan. With over 60 years of experience, Canadian Helicopters is an industry leader in establishing safety standards and operating procedures.


HNZ is a private company, owned 100% by South Canterbury Finance Limited (in Receivership). The company’s head office is located in Nelson, New Zealand and it has bases across New Zealand, Australia and South East Asia to support its operations. In New Zealand it services key contracts including Taranaki offshore operations, Antarctic missions and other ad hoc contracts. In Australia, it is based in Perth with operations in Karratha, Brisbane and Sale, and services contracts such as marine pilot transfers and fire services of Western Australia and Queensland. In Laos and Cambodia, it supports the American military’s Missing in Action program. HNZ also has a 50:50 joint venture with Totally Tourism, which has a concession from the Department of Conservation to land helicopters on the Fox and Franz Joseph glaciers in New Zealand.

, , , , ,

Copyright © 2022 HeliHub

Website by Design Inc

Helihub logo