Erickson Air-Crane Announces Definitive Purchase Agreement for Air Amazonia Aerial Services Business

Before you go, we thought you'd like these...
Before you go close icon

Erickson Air-Crane Announces Definitive Purchase Agreement for Air Amazonia Aerial Services Business

5 year aerial services agreement with minimum revenue of $29 million per year

PORTLAND, Ore.--(BUSINESS WIRE)-- Erickson Air-Crane, Incorporated ("Erickson" or "the Company") (NAS: EAC) today announced that it has signed a definitive purchase agreement to acquire Air Amazonia Serviços Aeronauticos Ltda. ("Air Amazonia"), the aviation services division of HRT Participações em Petróleo S.A. ("HRT"), as well as a fleet of six aircraft and ground facilities. The Company expects the transaction to close in the third quarter, following the satisfaction of certain customary closing conditions. Terms of the deal, which were revised from those previously disclosed in a binding term sheet announced on March 7, 2013, are described below.

Udo Rieder, Chief Executive Officer of Erickson Air-Crane, Incorporated, commented, "We are very pleased to have reached agreement with HRT for the purchase of the aerial services business of HRT. We are pleased with the structure of the transaction and in particular, because we are able to fund the initial purchase price with our existing revolving credit facility and will release the $45 million cash held in escrow under the notes offering. This preserves the potential financial upside contemplated by the previous structure, without the higher capital outlay. We believe that the transaction is an excellent use of capital, will prove to be significantly and immediately accretive, and produce Adjusted EBITDA margins in line with our core business. This is a significant step in our strategy of continuing our expansion into the South American oil and gas market."

Pursuant to our agreement, Erickson will pay $23.0 million at closing for the business, which includes a fully operational fleet of 6 rotary-wing aircraft of varying types and mission capabilities, and an additional $3.0 million within twelve months of closing as consideration for the achievement of certain milestones.

In conjunction with the acquisition, we will enter into a five year aerial services contract (including annual renewal options) with HRT to provide rotary-wing aircraft services to support their oil & gas activities in the Solimoes region. Erickson expects to service the contract with the 6 aircraft acquired from HRT in addition to deploying 2 currently idle aircraft from our fleet. The aerial services contract will provide Erickson with minimum revenue of $29 million per year.

Erickson will also have a right of first refusal to purchase any or all of HRT's remaining 8 aircraft over the next twelve months and the right of first refusal on all helicopter services in the Solimoes region of Brazil from HRT as operator, as well as on all helicopter services in all of Brazil (including offshore) from HRT.

Mr. Rieder continued, "We continue to push toward our vision of Erickson as a global, diversified aviation services provider to a wide range of customers, end markets, and geographies. We are excited to have made rapid progress both with our acquisition of Evergreen Helicopters ("EHI") and now again with Air Amazonia, which strengthens our position as a key partner for a growing number of customers throughout this important and fast growing region for the oil and gas industry. We are now turning our sights very squarely on world-class execution, a smooth integration, and the synergies and efficiencies we believe we can create throughout our combined organizations."

About Erickson Air-Crane Incorporated

Erickson Air-Crane Incorporated is a leading global provider of aviation services to a diverse mix of commercial and government customers. The Company currently operates a diverse fleet of 85 rotary-wing and fixed wing aircraft, including a fleet of 20 heavy-lift S-64 Aircranes. This fleet supports a wide and worldwide variety of government and commercial customers, across a broad range of aerial services, including critical supply and logistics for deployed military forces, humanitarian relief, firefighting, timber harvesting, infrastructure construction, and crewing. The Company also maintains a vertical manufacturing capability for the S-64 Aircrane, related components, and other aftermarket support and maintenance, repair, and overhaul services for the Aircrane and other aircraft.

Founded in 1971, Erickson Air-Crane is headquartered in Portland, Oregon and maintains facilities and operations in North America, South America, the Middle East, Africa and Asia-Pacific. For more information, please visit

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements that are subject to substantial risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. You can identify forward-looking statements by words such as "believe," "may," "estimate," "continue," "anticipate," "intend," "plan," "expect," "predict," "potential," or the negative of these terms or other comparable terminology. These forward-looking statements are based on management's current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of risks and uncertainties, which include: the possibility that we do not complete the acquisition of Air Amazonia, or realize the benefits of the acquisition of Evergreen Helicopters, Inc. ("EHI") or the Air Amazonia business on a timely basis or at all, including realizing expected Adjusted EBITDA margins; our ability to integrate these businesses successfully or in a timely and cost-efficient manner; our ability to successfully enter new markets and manage international expansion; that we do not have extensive operating history in the aerial services segments in which EHI and Air Amazonia operate nor with the types of aircraft we acquired in the EHI acquisition and those we would in the Air Amazonia acquisition; that we do not have extensive operating history in South America, the Middle East and Africa, which are where EHI and Air Amazonia provide aerial services; that we do not have any operating history providing services to the Department of Defense and related customers and projects, which are segments to which EHI provides services; that, despite our current indebtedness levels, we and our subsidiaries may still incur significant additional indebtedness; our failure to obtain any required financing on favorable terms; our safety record; the hazards associated with our helicopter operations, which involve significant risks and which may result in hazards that may not be covered by our insurance or may increase the cost of our insurance; compliance with debt obligations and our substantial indebtedness, which could adversely affect our financial condition and impair our ability to grow and operate our business; cancellations; reductions or delays in customer orders; our ability to collect on customer receivables; weather and seasonal fluctuations that impact our Aircrane and other aerial services activities; competition; reliance on a small number of large customers; the impact of short-term contracts; the availability and size of the Aircrane fleet; the ability to implement production rate changes; the impact of government spending; the impact of product liability and product warranties; the ability to attract and retain qualified personnel; the impact of environmental and other regulations, including FAA regulations and similar international regulations; our ability to accurately forecast financial guidance; our ability convert backlog into revenues and appropriately plan expenses; worldwide economic conditions (including conditions in Greece and Italy); our reliance on a small number of manufacturers; the necessity to provide components or services to owners and operators of aircraft; our ability to effectively manage our growth; our ability to keep pace with changes in technology; our ability to adequately protect our intellectual property; our ability to successfully enter new markets and manage international expansion; our ability to expand and diversify our customer base; our ability to expand and market manufacturing and maintenance, repair and overhaul services; the potential unionization of our employees; the fluctuation in the price of fuel; our ability to access public or private debt markets; the impact of equipment failures or other events impacting the operation of our factories; and our ability to successfully manage any future acquisitions; as well as other risks and uncertainties more fully described under the heading "Risk Factors" in our most recently filed Annual Report on Form 10-K and Quarterly Reports on Form 10Q, as well as the other reports we file with the SEC.

You should not place undue reliance on any forward-looking statements. Erickson Air-Crane assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable laws.

Investor Relations Contact:
ICR, Inc.
James Palczynski, 203-247-2095
Media Contact:
ICR, Inc.
Anton Nicholas, 203-682-8245

KEYWORDS:   United States  Brazil  North America  South America  Oregon


The article Erickson Air-Crane Announces Definitive Purchase Agreement for Air Amazonia Aerial Services Business originally appeared on

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

People are Reading