WILMINGTON, Ohio & NEW YORK - Air Transport Services (NASDAQ:ATSG) Group, Inc. (NASDAQ:ATSG), a key player in medium widebody freighter aircraft leasing and air transport services, has announced its acquisition by Stonepeak, an alternative investment firm. The all-cash transaction is valued at approximately $3.1 billion.
ATSG shareholders are set to receive $22.50 per share, which is a 29.3% premium over the company's closing share price on November 1, 2024, and a 45.5% premium over the volume-weighted average price over the prior 90 trading days. Post-transaction, ATSG will become a private entity and its shares will cease trading on NASDAQ.
Joe Hete, Executive Chairman of ATSG's Board of Directors, expressed confidence that the agreement with Stonepeak is in the best interest of shareholders, employees, and other stakeholders. Mike Berger, CEO of ATSG, highlighted the value of the company's fleet and the strength of its team, while Stonepeak representatives, James Wyper and Graham Brown, acknowledged ATSG's role in e-commerce growth and expressed enthusiasm for the future partnership.
The transaction is slated for completion in the first half of 2025, pending shareholder and regulatory approvals. It is supported by fully committed equity financing from Stonepeak-affiliated funds and committed debt financing, and is not contingent on financing conditions.
A "go-shop" period is included in the agreement, allowing ATSG to seek alternative proposals until December 8, 2024, or December 23, 2024, in certain cases. There is no guarantee that this process will result in a superior proposal.
In conjunction with this announcement, ATSG has canceled its earnings conference call previously scheduled for November 8, 2024, and will instead release its third-quarter financial results on that day.
Goldman Sachs (NYSE:GS) & Co. LLC and legal firms Davis Polk & Wardwell LLP and Vorys, Sater, Seymour & Pease LLP are advising ATSG, while Evercore and legal firms Simpson Thacher & Bartlett LLP and Hogan Lovells US LLP are advising Stonepeak.
This news is based on a press release statement and includes forward-looking statements that involve risks and uncertainties. ATSG does not plan to disclose developments regarding the solicitation process unless deemed appropriate by its Board of Directors.
In other recent news, Air Transport Services Group (ATSG) reported notable developments. Investment firm Stonepeak is set to acquire ATSG in a deal valued at approximately $3.1 billion. This acquisition comes amidst a surge in demand for air cargo transportation, with ATSG being a significant player in the sector. Despite a recent downturn, ATSG anticipates a rebound in demand in upcoming quarters.
In the company's earnings conference call, ATSG reported a robust second quarter in 2024 and raised its adjusted EBITDA forecast to approximately $526 million. The company also highlighted an expansion of their agreement with Amazon (NASDAQ:AMZN), adding 10 more aircraft to the fleet by peak season. The company's commitment to safety, customer satisfaction, and cost control, alongside these recent developments, signal a trajectory of continued growth.
InvestingPro Insights
The acquisition of Air Transport Services Group (ATSG) by Stonepeak at $22.50 per share aligns closely with the fair value of $22.00 suggested by analyst targets, according to InvestingPro data. This valuation premium underscores the attractiveness of ATSG's business model in the eyes of investors, particularly given the company's strategic position in the e-commerce-driven air freight market.
InvestingPro Tips reveal that ATSG has been profitable over the last twelve months, with analysts predicting continued profitability this year. This financial stability likely contributed to Stonepeak's interest in the acquisition. Additionally, ATSG's strong return over the last three months, as highlighted by another InvestingPro Tip, may have influenced the timing of the deal.
It's worth noting that ATSG operates with a significant debt burden, according to an InvestingPro Tip. This factor might have played a role in the company's decision to accept Stonepeak's offer, as private ownership could provide more flexibility in managing the company's financial structure.
For investors seeking deeper insights, InvestingPro offers 8 additional tips that could provide further context to this significant transaction in the air transport services sector.
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