Private investment firm Stonepeak is to take Air Transport Services Group (ATSG) in a deal valued at $3.1bn, including debt, with shares of the aircraft leasing company surging 27% in pre-market trading after the news broke, according to a report by Reuters.
Stonepeak will acquire ATSG at $22.50 per share, representing a 29.3% premium over the company’s closing price on Friday.
Reports on Sunday revealed that Stonepeak was in advanced negotiations to acquire ATSG, a company primarily focused on purchasing used passenger planes and converting them into freighters for lease.
As of 30 June, ATSG operated a fleet of 114 freighter aircraft, with most of them being Boeing 767 models. The company also manages cargo aircraft for Amazon, which holds warrants allowing it to purchase shares in ATSG.
The deal, which is expected to close in the first half of next year, comes as ATSG reported an 8% decline in second-quarter revenue in August, driven by a downturn in its aircraft leasing and cargo services segments. The company had leased fewer 767-200 freighters compared to the previous year.
Despite the decline, ATSG anticipates its full-year adjusted EBITDA to be around $526m, marking a $10m increase from its previous forecast due to rising demand for its newly converted freighters.
The transaction, which will be financed through fully committed equity and debt from funds associated with Stonepeak, does not include a financing condition.
