Discovery Air sells 16% of Discovery Air Defence Services for $25M

Discovery Air Inc. (TSX: DA.DB.A), a portfolio company of Clairvest Group Inc. (TSX: CVG), has sold 16% stake in Discovery Air Defence Services Inc. (DA Defence) to an unnamed large third party institutional investor for $25 million.

Discovery Air will continue to own approximately 10% of DA Defence, down from 26%.

On December 14, 2017, Clairvest exercised the pre-existing optional conversion feature pursuant to the terms of outstanding credit facilities between, among others, affiliates of Clairvest, Discovery Air and DA Defence to convert amounts outstanding under such credit facilities to common shares of DA Defence and (ii) the swap option pursuant to a letter agreement between Discovery Air, DA Defence and affiliates of Clairvest, to exchange senior secured convertible debentures of Discovery Air for common shares of DA Defence. Following the completion of the conversion transaction, Discovery Air will have approximately $60 million less of secured debt. Discovery Air stake in DA Defence was reduced from 100% to 26% as result of the conversion.

In May 2017, Clairvest, Clairvest Equity Partners IV Limited Partnership, Clairvest Equity Partners IV-A Limited Partnership, CEP IV Co‐Investment Limited Partnership took Discovery Air private, acquiring all of the issued and outstanding Class A shares and Class B shares of Discovery Air not already owned for $0.20 per share for a consideration of approximately $1.5 million to minority shareholders.

DA Defence is the prime supplier of contracted airborne training services to the DND and the Canadian Armed Forces, and a supplier of airborne training services to other militaries around the world.

photo credit: Discovery Air Defence Services Inc.

News Release

Discovery Air Announces Equity Financing for Defence Business

Toronto, ON – December 22, 2017 – Discovery Air Inc. (“Discovery Air”) (TSX: DA.DB.A) announced today that Discovery Air Defence Services Inc. (“DA Defence”) closed an equity financing transaction with a large third party institutional investor, pursuant to which, among other things, such third party institutional investor purchased $25 million of common shares of DA Defence from Discovery Air.

Discovery Air continues to own approximately 10% of DA Defence. Discovery Air will use the proceeds of such transaction to, among other things, reduce its secured debt.

DA Defence also recently completed its own senior debt financing transaction with a syndicate of large Canadian financial institutions.

About Discovery Air

Discovery Air is a global leader in specialty aviation services including medevac equipped aircraft services, air charter services, helicopter operations, and transport and logistics support to ensure operational readiness, health, safety and vital lifelines for our clients and the communities we serve.

Discovery Air’s unsecured convertible debentures trade on the Toronto Stock Exchange (symbol DA.DB.A).

For further information, please contact Investor Relations at 866-903-3247.

About Discovery Air Defence Services Inc.

DA Defence and its U.S. subsidiary, Top Aces Corp., have the world’s largest privately-held operating fleet of fighter aircraft. The training provided supports the operational readiness of both current and future generation fighter aircraft. Discover more on how DA Defence is changing the face of air combat training at experiencematters.ca.

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.