Stonepeak to buy ATSG for $3.1 billion
ATSG shareholders to receive $22.50/share in cash, a premium of approximately 29.3% over closing price on Nov 1, 2024.
From left: Joe Hete, Executive Chairman; Mike Berger, Chief Executive Officer; Jeffrey Dominick, President, ATSG.
Nasdaq-listed Air Transport Services Group (ATSG), a global leader in medium widebody freighter aircraft leasing, air transport operations and support services, has entered into a definitive agreement to be acquired by Stonepeak, a leading alternative investment firm specialising in infrastructure and real assets, for an enterprise valuation of approximately $3.1 billion.
Common shareholders of ATSG will receive $22.50 per share in cash, says an official release. "The purchase price represents a premium of approximately 29.3 percent over ATSG’s closing share price on November 1, 2024, the last full trading day prior to this announcement, and a 45.5% percent premium over ATSG’s volume-weighted average price over the prior ninety trading days. Upon completion of the transaction, ATSG's shares will no longer trade on Nasdaq and ATSG will become a private company."
Joe Hete, Executive Chairman, ATSG says: “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. Since going public in 2003, ATSG has diversified and expanded its portfolio of companies and services, becoming a global leader in midsize freighter leasing and flying, as well as a leading supplemental provider of passenger transport for the U.S. Department of Defense and other agencies. Following the Board’s careful evaluation of the transaction, we are confident it is the best path forward and maximises value for ATSG’s shareholders, while also benefiting our employees, customers, partners, communities and other stakeholders.”
Mike Berger, CEO, ATSG adds: “This transaction reflects the tremendous value of our fleet of in-demand midsize freighter and passenger aircraft, and the strength of our talented teams across ATSG’s businesses. In Stonepeak, we have found a partner that recognises the power of our Lease+Plus strategy to provide comprehensive aircraft leasing and operating solutions to our customers. With Stonepeak’s investment and extensive expertise in transportation and logistics and asset leasing, ATSG will be well positioned to further expand its global presence in the air cargo leasing market and enhance its service offerings to customers. We would like to thank our employees for helping us achieve this significant milestone and for their continued dedication as we prepare to enter this new chapter as a private company.”
James Wyper, Senior Managing Director and Head of Transportation & Logistics, Stonepeak says: “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. 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.”
The transaction is expected to close in the first half of 2025, subject to customary closing conditions, including approval of ATSG’s shareholders and receipt of regulatory approvals, the release added. "The agreement includes a go-shop period. Under the terms of the merger agreement, ATSG may solicit proposals from third parties for a period of 35 days continuing through December 8, 2024, and in certain cases for a period of 50 days continuing through December 23, 2024. In addition, ATSG may, at any time prior to receipt of shareholder approval, subject to the provisions of the merger agreement, respond to unsolicited proposals that constitute or would reasonably be expected to result in a superior proposal. ATSG will have the right to terminate the merger agreement with Stonepeak to enter into a superior proposal subject to the terms and conditions of the merger agreement, including payment of a customary termination fee."
ATSG will release its financial results for the third quarter of 2024 on November 8, 2024, and has cancelled the earnings conference call previously scheduled for the same day, the release added.
Stonespeak assets
Stonepeak has $70 billion assets under management with 250+ global staff and 68 investments across 61 countries.
Stonepeak closed its Stonepeak Opportunities Fund at its revised hard cap of $3.15 billion with commitments from a diverse group of global investors in August 2024. "The Fund targets core-plus and value-add opportunities in the middle-market infrastructure sector, including control investments as well as structured capital solutions, with a focus on communications, transport and logistics, and energy and energy transition assets in North America and Europe."
Stonepeak announced the acquisition of nine logistics assets totaling 1.8 million square feet in Jacksonville, Florida today (November 4, 2024).
"The assets are strategically located near the Port of Jacksonville, which lifts 1.3 million TEUs annually and is investing more than $1 billion over the next five years to improve access and utilisation of this critical transport infrastructure. Jacksonville’s transport infrastructure is further supported by an extensive rail network anchored by CSX, Norfolk Southern, and the Florida East Coast Railway. Jacksonville has also seen positive demographic trends with a 1.7 million population that has grown 4x the national average since 2013 and is expected to grow by 2x the national average over the next decade."
Stonepeak had announced the acquisition of two logistics assets totaling 1.1 million square feet in Fort Worth, Texas from institutional investors advised by J.P. Morgan Asset Management on September 5, 2024.
"The assets are strategically located in the Alliance submarket of Dallas-Fort Worth (DFW), which is anchored by two Class I rail lines, the BNSF Alliance intermodal terminal, and the Fort Worth Alliance cargo airport, all of which have direct access to the I-35 NAFTA highway linking Mexico to Canada. The Alliance submarket’s transport infrastructure is supported by DFW’s population of over eight million residents, which is expected to grow by 4x the national average through 2028."
Atlas Air Worldwide, a leading global provider of outsourced aircraft and aviation operating services, was acquired by funds managed by Apollo, J.F. Lehman and Hill City Capital for over $5 billion in March 2023.
