Commercial, Military

Rotorcraft Report: Investors to Buy Out CHC Helicopter in $3.7 Billion Deal

By Staff Writer | April 1, 2008
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In a clear sign that offshore-support helicopter operations should generate steady flows of cash for the foreseeable future, private investors in February plan to buy out a major player in that market: CHC Helicopter Corp.

Richmond, British Columbia-based CHC accepted an offer from the U.S. private-equity firm First Reserve Corp. to buy all outstanding shares of its stock and take the company private. The offer was valued at $1.48 billion, but when debt to be assumed on closing and the assumed liability of off-balance-sheet aircraft leases is considered, analysts said, the price tag is roughly $3.7 billion.


The transaction, if completed, arguably would be the largest buyout in the oilfield-services industry. This transaction will mark the beginning of an exciting new phase in CHC’s history," CHC President and CEO Sylvain Allard said, adding the transaction would help "strengthen our position as the largest helicopter service company in the world."

Earlier this year, the credit-rating service Moody’s cut its rating for CHC, citing the company’s means of financing its fleet expansion. While the fleet expansion "is in response to strong customer demand driven by the deepwater development trends," Moody’s said, "CHC has funded these capital expenditures almost exclusively with lease financing and revolver borrowings." Moody’s said CHC has purchased 43 heavy and medium helicopters since its fiscal year ended Apr. 30, 2006, increasing its fleet size 10 percent.

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