North American Company Expands Into The Southern Hemisphere

The largest helicopter transportation services company operating in Canada said Thursday 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 (HNZ). The parent company, Canadian Helicopters Group Inc., said the transaction purchase price is approximately $127 million on a debt free and cash free basis, and is subject to customary adjustments.

HNZ has operated for 55 years in New Zealand, Australia and Asia. 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 approximately $66 million.

“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," said Don Wall, President and Chief Executive Officer of Canadian Helicopters. 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.

It is anticipated that HNZ’s entire team will continue to support the HNZ business following the closing of the Transaction. The company'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.

CHL says 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, they believe HNZ is well positioned to capitalize on new opportunities in that country.

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.

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 nearly $130 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.

FMI: www.canadianhelicopters.ca, www.hnzglobal.com