Air Transport Services Group and Stonepeak Acquisition

(Reuters) – Air Transport Services Group announced on Monday that investment firm Stonepeak is acquiring the company in a deal valued at $3.1 billion, including debt, leading to a 27% rise in the aircraft lessor's shares before market opening.

Stonepeak will pay $22.5 per share, reflecting a 29.3% increase over Air Transport's closing price from the previous Friday.

On Sunday, Reuters reported that Stonepeak was in advanced negotiations to take over ATSG, whose main business involves purchasing used passenger aircraft, converting them into freighters, and leasing them to customers.

As of June 30, ATSG was operating 114 freighter aircraft, predominantly consisting of Boeing (NYSE:BA) 767 models. The company also provides freighter services for Amazon.com (NASDAQ:AMZN)’s air cargo network, which holds warrants to acquire shares in the lessor.

ATSG anticipates that the transaction will conclude in the first half of the following year.

In August, ATSG reported an 8% decrease in second-quarter revenue, attributed to a reduction in both its aircraft leasing and cargo services segments, with a decline in the leasing of 767-200 freighters compared to the prior year.

Despite this, the firm projects its full-year adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to be around $526 million, a $10 million increase from prior forecasts, as interest for newly converted freighters remains strong.

The acquisition will be completely financed by equity funds affiliated with Stonepeak, along with fully committed debt financing. This deal is not subject to any financing conditions, ATSG confirmed.