New owner to acquire Wilmington air cargo carrier in $3.1B deal

Holders of ATSG’s common shares will receive $22.50 per share in cash, ATSG said, adding that the purchase price is about 29.3% over ATSG’s closing share price Friday, the last full trading day before the announcement, and 45.5% over ATSG’s volume-weighted average price over the previous 90 trading days.

On completion of the deal, ATSG’s shares will no longer trade on NASDAQ, and ATSG will become a private company.

Quint Turner, ATSG’s chief financial officer, said in an interview Monday that he doesn’t expect employment changes because of the acquisition, and the company’s corporate headquarters will remain in Wilmington. If anything, he added, he sees opportunities for growth.

“It’s not going to move,” Turner said of the headquarters. “It’s still going to be here ... “I think it’s business as usual for us.”

Joe Hete, executive chairman of ATSG’s board, said in a statement: “The agreement with Stonepeak will deliver immediate and certain cash value to ATSG’s shareholders at a substantial premium to recent market prices. With a history dating back to 1980, we are excited to reach this important milestone in our journey.”

ATSG went public in 2003.

Shares of ATSG were up $4.56, a 26.2% rise, in mid-morning trading Monday, trading at about $21.95.

“ATSG plays a fundamental role in enabling the growth of e-commerce globally in a world that continues to shift away from brick-and-mortar shopping,” said James Wyper, senior managing director and head of transportation and logistics at Stonepeak. “ATSG’s deep relationships with some of the world’s largest e-commerce companies and integrators, combined with the scale and capacity of their fleet and relentless focus on safety and on-time performance, gives us confidence in the company’s trajectory as a sector leader.”

ATSG has seen notable growth and attention in recent years. Amazon has invested in the company, becoming a minority stakeholder in the aircraft leasing business.

By the spring of 2021, Amazon exercised warrants to claim an ownership stake of nearly 20% of ATSG — and was poised to perhaps double that stake in the future.

That evolved from a warrant agreement Amazon had with ATSG since 2016. Amazon could have performed a net share sale of the warrants, which operate something like stock options. But the route Amazon took instead means it paid cash for the warrants (or most of them), making an investment in ATSG of more than $131 million.

The Amazon stock will be purchased just like other shareholders’ stock, Turner said. And the company’s long-term agreements with Amazon remain in place, he said.

“They were certainly supportive of the deal,” Turner said of Amazon.

In August, the company said that Omni Air International, a wholly owned subsidiary of ATSG, will fly the New England Patriots NFL team under a new long-term agreement.

Turner said company leaders met with employees Monday in Wilmington with a representative of the new owner to share the news. He said the meeting went well.

“We’ve been very proud of our employees here,” the CFO said. “ They’ve been the key to our success over the years.”

“ATSG operates in an attractive space, with online shipping needs only likely to continue to grow, and Amazon, one of ATSG’s largest customers, leading the way,” Jim Corridore, a senior industrials analyst at PitchBook, said in a note. “The takeout price, about 6X EBITDA (earnings before interest, taxes, depreciation and amortization) seems like a reasonable price given strong fundamentals in place, but ATSG’s financial performance has been uneven, giving good opportunity for Stonepeak to come in and make operational and financial improvements.”