Republic Airways to sell Frontier Airlines for $145 million
Indigo Partners and its principals, led by managing partner William A. Franke, have a history of investing in airline transportation and related industries and creating successful, differentiated companies.
Under the terms of the stock purchase agreement, which has been approved by Republic's Board of Directors, the buyer, an affiliate of Indigo Partners, will acquire all the outstanding shares of Frontier Airlines Holdings, Inc. in a transaction valued at approximately $145 million, of which $36 million (subject to certain adjustments under the purchase agreement) is to be paid in cash for the equity of Frontier Holdings and the balance is indebtedness that will be retained by Frontier.
In addition, Indigo plans to invest additional funds directly in Frontier after the closing.
As part of the transaction, under a separate agreement, Republic will assign to Frontier all of Republic's rights under agreements relating to the Republic's Airbus A320neo order in exchange for reimbursement of pre-delivery deposits, which total $32 million.
Completion of the transaction is conditioned on agreements being reached with the Association of Flight Attendants (AFA) and FAPAInvest LLC by no later than Oct. 31, 2013, as well as agreement and documentation of other third-party commercial agreements.
The transaction is also subject to receipt of required approvals by the Federal Communications Commission for the transfer of Frontier's radio licenses, the receipt of certain third-party consents and releases and other customary closing conditions. ■