Texas Chopper Firm Buys Into Brazil

Texas-based helicopter services provider Bristow has acquired a 42.5% stake in Brazil’s Lider Aviation for $174m. “Brazil represents Bristow’s single best opportunity for growth,” says the buyer. Of the purchase price, Bristow – which focuses on the oil and gas industry – paid Lider $80m in cash and $94m in cash to shareholders. However, it also received $55m for 5 Bristow aircraft it sold to Lider, resulting in a net cash outlay of $119m. Bristow estimates the enterprise value (EV) without earn-out at $400m and says the implied annualized 2009 adjusted Ebitda multiple is 8x. With full earn-out, it calculates the EV at $525m and implied forward Ebitda multiple at 7x. The 42.5% stake includes approximately 20% of voting rights and Bristow will have the right to provide helicopters for 100% of Lider’s helicopter lease requirements, as well as the right to lease to Lider 50% of total medium and large helicopter requirements – that it would otherwise have met through purchase or finance lease – for the next 5 years. Bristow will have minority shareholder rights on changes in bylaws, equity issuance and any merger or spin-off, and certain changes in debt levels. Bristow has right of 1st refusal on any secondary sale of Lider shares, tag along rights in the event that other stockholders sell, and can appoint 1 of 5 board members and 1 senior manager. “Lider provides the most attractive entry point for a significant share of the growing Brazilian oil & gas helicopter services market,” says the buyer. Bristow claims Lider as the leading helicopter and executive aviation services provider in Brazil, with 38% of Petrobras’ business. It notes Brazil’s growing capital commitment to oil and gas development and estimates at least 30 new helicopters will be needed in next 5 years for activity growth and replacement of aging aircraft. JPMorgan advised the deal.