A New York-based investment group is sinking at least $500 million into B.C.’s CHC Helicopters (NYSE: HELI) in a deal that will shake up the boardroom as a new single-largest shareholder comes into the fold.
CHC announced August 21 that Clayton, Dubilier & Rice (CD&R) secured a 45% stake of the Richmond-based helicopter company through the half-billion-dollar.
Meanwhile, CD&R operating partner John Krenicki, the former CEO of GE Energy, is set to become chairman of CHC’s board at the close of the deal.
The investors will also appoint three more directors to the boardroom, as CD&R becomes the single-largest shareholder of the B.C. company.
CHC Helicopters has about 70 bases throughout the world that it uses to ferry workers to remote oilrigs. It also assists with search-and-rescue efforts and provides repair and maintenance services.
The company employs about 4,500 full-time workers and brought in $1.8 billion in revenue during its fiscal year ending April 30.
“We remain extremely optimistic about the fundamentals about the global helicopter industry and the company’s unique place within the industry,” CHC president and CEO William Amelio said in a conference call with analysts and investors.
“We plan to use the first proceeds from the investment to continue to reduce debt and fixed charges, optimize the mix of owned and leased aircraft, and for other general corporate purposes.”
CD&R’s investment could exceed $500 million as the transaction provides existing shareholders the opportunity to buy up to $100 million in shares under the same conditions.
Provisions in the deal require CD&R to purchase shares that are not scooped up, so the entire deal is expected to bring in $600 million for CHC.
