Air-Crane closes Evergreen acquisition
That shifts the fleet of its new Evergreen subsidiary, a mix of rotary and fixed-wing craft, to 50 owned and 35 leased.
Udo Rieder, Erickson’s CEO, called the acquisition transformational for the company. He made it clear his company planned to move aggressively to capitalize, as evidenced by the swift acquisition move.
“Given our strong financial position and flexibility, we decided to opportunistically purchase some aircraft which we consider key to our product offering, while at the same time eliminating and annual and future lease obligations,” he said. He said acquisition of the aircraft would eliminate $3 million of annual lease expense and $12.2 million of total lease obligations, while increasing the company’s asset base.
Erickson’s strength is in heavy-lift capability. The Evergreen acquisition greatly expands its passenger and light-lift capability, rounding out its roster of services.
Evergreen Helicopters does significant business with theU.S. military to support overseas operations. It also has a mix of other commercial and government customers.
In addition to closing on acquisition of Evergreen Helicopters, the company is nearing closure on Brazil-based Air Amazonia fleet from HRT Oil & Gas.
Erickson recently announced record first-quarter earnings, serving to help justify its aggressive expansion.
For the fiscal quarter ending in March, revenue was up 33.8 percent to $36.9 million, a new record. And it was achieved during what has traditionally been the company’s weakest quarter of the year.
Rieder attributed the strong results to across the board gains, driven by a very active fire season in Australia, strong growth in gas and oil industry work and a lively quarter for timber industry assignments.
“This was a strong start to 2013,” he said. “Performance by our aircrane operations and our completion of the (Evergreen Helicopters) transaction position us to quickly transform our business.
“We believe the execution of our strategic acquisition program is enabling us to emerge as a highly diversified, global company with a wide array of opportunities to generate high-margin growth. We expect to demonstrate our ability to drive value to the full range of our constituents, including customers, partners and shareholders.”
In a conference call to discuss the results, Reider said the Evergreen acquisition not only “doubles the size of our business,” but also “gives us true global scale and creates a wide range of new growth opportunities.”
He said Evergreen recorded $201 million in revenue last year and logged EBITDA (earnings before interest, taxes, depreciation and amortization) of $51.2 million. If the acquisition had closed prior to the start of the year, the combined operations would have produced revenue of $382 million and EBITDA of $107.5 million, he said.
And Rieder said Evergreen achieved that using only about half the fleet available to Erickson.
“This leaves us a great opportunity to use additional capacity for future growth,” he said. “This provides us a number of powerful, high level, fundamental advantages.”
Rieder said government business accounts for about 95 percent of Evergreen’s revenue, givingErickson entry to new territory.