Erickson Air-Crane acquires Evergreen Helicopters

PORTLAND, Ore., 25 March 2013. Erickson Air-Crane Inc. (NASDAQ:EAC), an operator and the manufacturer of the Erickson S-64 Aircrane heavy-lift helicopter, plans to acquire Evergreen Helicopters Inc. (EHI) in McMinnville, Oregon, from Evergreen International Aviation Inc.

EHI, founded by aviation pioneer Delford Smith, is a diversified global provider of air transport services for cargo and personnel to government and commercial customers.

Under the terms of the purchase agreement, EHI is being acquired from EIA for $250.0 million.

At closing, this transaction would provide Erickson Air-Crane with an incremental fleet of 64 aircraft, including helicopters and fixed-wing airplanes, capable of providing significant passenger transport and airlift services for the U.S. military.

EHI’s operations span the globe, including a presence in North America, the Middle East, Africa, and Asia Pacific.

In calendar year 2012, EHI’s unaudited revenue was $196 million and Adjusted EBITDA was $56.2 million, representing an Adjusted EBITDA margin of over 25 percent. (When calculating EBITDA, EHI, in line with certain other aviation companies, adds back the amortization of certain capitalized overhaul costs.)

“We are very excited to be on the cusp of truly transforming our business,” says Udo Rieder, president and chief executive officer of Erickson Air-Crane. “We are successfully transcending our market position as a leader in heavy-lift operations to build a diverse, global aviation services provider. Our combined company will offer a comprehensive set of capabilities, a world-class customer base, a diverse portfolio of aircraft, and the ability to service nearly every corner of the globe.”

Rieder remarked, “At a purchase price multiple of less than 5.0x EHI’s 2012 Adjusted EBITDA, the acquisition of EHI is expected to be immediately accretive to EAC’s earnings per share."

The transaction is expected to close during the second quarter of 2013.

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 percent. The combined business would operate a diverse fleet of 100 aircraft.

Rieder adds: “The combination of these three businesses would diversify our end-markets, regions serviced, mission capabilities and aircraft types. In addition to significant growth, we believe the combinations carry significant hard cost synergies that could be leveraged throughout the system to increase efficiency, fleet and MRO capacity utilization, and overall economies of scale.”

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