What will happen to helicopter finance in 2014
After CHC, we could see more helicopter companies return to the stock market.
The next 12 months will be fascinating ones for helicopter finance. CHC’s float will dominate the start of the year; First Reserve hopes to raise around $500 million in an initial public offering with the cash being used to pay down debt. It is looking to sell 29.4 million shares at a price range of $16 to $18. If it gets $17 for each share, it would give CHC a market value of $1.3 billion, down from around the $1.5 billion that First Reserve has invested in it since 2008. First Reserve will still be the majority owner after the IPO.
For the last 10 years we have seen many of the largest operators bought by private equity companies. It started with Brockway Moran’s investment in Air Evac Lifeteam in July (which led to Air Medical Group, now owned by Bain Capital) and we have seen a lot of consolidation happen because of it.
Avincis has acquired at least six companies internationally and the US EMS market has been completely reshaped. Now, with CHC we may be seeing the start of these companies returning to stock markets, although we may see private equity companies replicate their helicopter strategies in Asia.
The other helicopter investment that private equity firms have liked in the last three years is helicopter leasing. With private equity start-ups and commercial aircraft leasing companies moving into helicopters, we now have five well-capitalised helicopter lessors fighting for deals. You also cannot rule out the first helicopter leasing company IPO taking place this year either.