ATSG completes Omni Air acquisition
12 / 11 / 2018
ATSG has completed the previously announced acquisition of Omni Air International LLC (Omni Air), a passenger ACMI and charter services provider, for $845m.
Omni Air, founded in 1993 and with a fleet of 13 passenger aircraft, a mix of Boeing 767 and Boeing 777 extended range units, serves the US and allied foreign governments and commercial customers.
The combination with Omni Air is anticipated to add over $430m in annualised revenues to ATSG, which is also a provider of B767 converted freighter services to e-tailing giant Amazon.
Joe Hete, president and chief executive of ATSG, said: "Completing this Omni acquisition is a milestone achievement for ATSG.
"It increases both our revenue and our adjusted earnings before interest, tax, depreciation and amortisation expectations for 2019 by more than 40%, brings increased revenue diversification, and adds both passenger service and Boeing 777 capabilities to our range of services. We are eager to work with Omni’s management to pursue the many opportunities our combined assets and talented associates can address.”
While Omni Air does not own any freighter aircraft, ATSG said in a conference call when the deal was first announced that the B767 aircraft owned by Omni could become feedstock for freighter conversions when they reach the right age.
There has also been much discussion about the launch of a potential B777 conversion programme, given the current popularity of the production version of the all-cargo model.
In contemplation of the Omni purchase, ATSG agreed to amend its senior credit facility with a consortium of banks led by SunTrust Bank, previously dated May 31, 2016.
The new amended agreement has an aggregate principal amount of $1.28 billion, consisting of the continuing secured revolving credit facility of $545m, a continuing secured term loan with a current balance of $60m, and a new $675m secured term loan. The maturity date of these loans is May 30, 2023.
The amended facility includes an accordion feature that would allow the total amount of borrowings under the facility to increase by up to $400m, assuming certain conditions and with bank consent.
The total amount of additional debt ATSG and its subsidiaries may incur outside of the amended facility increases from $300 million to $500m.
Credit terms are consistent with the existing facility, including with respect to provisions limiting ATSG’s ability to declare or pay dividends or repurchase shares, and requires ATSG to maintain specified financial ratios and minimum collateral values, and meet other financial condition tests.
The facility is secured by substantially all of ATSG’s Boeing 777, 767 and 757 aircraft.
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