Canadian investor to acquire regional carrier Calm Air

[Henry Tenby]

Canadian investor to acquire regional carrier Calm Air
Victoria Moores (Mar11 2009)

Canadian and US niche investor Exchange Industrial Income Fund (EIIF) has agreed to acquire Canadian regional carrier Calm Air for C$59 million ($46 million).

Manitoba-based Calm Air operates 15 aircraft and has been active in northern Canada for over 40 years. It employs 400 staff, providing daily scheduled and chartered turboprop passenger and cargo flights throughout the remote regions of Northern Manitoba and Nunavut, as well as seasonal flights.

Niche aviation and speciality manufacturing investor EIIF says it has signed a letter of intent to acquire Calm Air through a wholly-owned subsidiary. The deal, which is expected to close in late March, is subject to due diligence, a public offering and normal closing conditions.

Calm Air builds on EIIF's existing aviation interests, Perimeter Aviation and Keewatin Air which operate aircraft in the nine- to 19-seat range. Calm Air, which will replace two of its Hawker aircraft with ATRs over the next four years, will introduce 30- to 40-seat aircraft into the group with minimal network overlap.

EIIF chief financial officer Adam Terwin says: "The acquisition of Calm Air is a significant step forward for EIIF, representing an accretive acquisition that is approximately three times larger than any acquisition EIIF has completed to date.

"The Calm Air acquisition will essentially double the size of EIIF's aviation division, and raise the fund's profile as a leading regional airline carrier."

During the nine months ended 30 September 2008, Calm Air generated C$63 million in revenues yielding an EBITDA of C$11.7 million. In 2007 its turnover totalled C$70 million and EBITDA stood at C$13.9 million.

EIIF president and CEO Mike Pyle says: "We believe Calm Air is an excellent operational and strategic fit for us. The transaction meets our key acquisition criteria of attractive margins, a defensible market position, and the ability to retain key management personnel."

Source: Air Transport Intelligence news