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Erickson Air-Crane buys Evergreen Helicopters for $250 million

Staff writer |
Erickson Air-Crane, an operator of heavy-lift helicopters, bought Evergreen Helicopters (EHI) from Evergreen International Aviation (EIA) for $250 million.

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EHI, based in McMinnville, Oregon, is a diversified global provider of air transport services for cargo and personnel to government and commercial customers. EHI was founded by aviation pioneer Delford Smith. At closing, this transaction would provide Erickson Air-Crane with an incremental fleet of 64 aircraft, consisting of both helicopters and fixed-wing airplanes.

In calendar year 2012 EHI's unaudited revenue was $196.0 million and Adjusted EBITDA was $56.2 million, representing an Adjusted EBITDA margin of more than 25%. The transaction is expected to close during the second quarter of 2013.

EHI is being acquired from EIA for $250 million, consisting of $185 million in cash, $17.5 million in unsecured promissory notes issued by Erickson Air-Crane, and approximately $4 million mandatorily convertible preferred shares of Erickson Air-Crane valued at $47.5 million (based on an agreed value of $11.85 per share). The preferred shares are convertible, at the option of the company, into an equal number of common shares, which the company intends to seek following the closing of the EHI acquisition.

Up to $26.3 million in contingent consideration may be payable by Erickson Air-Crane (in cash or promissory notes) to EIA based on certain revenue targets for the calendar years 2013, 2014 and 2015. Erickson Air-Crane is expecting that, at a purchase price multiple of less than 5.0x EHI's 2012 adjusted EBITDA, the acquisition of EHI be immediately accretive to EAC's earnings per share.

The combination of Erickson Air-Crane's stand-alone business with the planned acquisitions of Air Amazonia and EHI would, if both transactions close, create a business with pro forma 2012 revenues of approximately $430 million and EBITDA margins of approximately 25%. The combined business would operate a diverse fleet of 100 aircraft.

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