Don Wall and PHI to take Fonds de solidarité backed HNZ private for $242M

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By Ted Liu

HNZ Group Inc. (TSX: HNZ) and PHI, Inc. (NSADAQ: PHII) have entered into an arrangement agreement pursuant to which Don Wall, President & CEO of HNZ, through a wholly-owned acquisition, will acquire all of the issued and outstanding common and variable voting shares of HNZ Group for CDN $18.70 per share in cash for approximately $242 million in total equity value.

As part of the arrangement, PHI will HNZ’s offshore business conducted in New Zealand, Australia, the Philippines and Papua New Guinea. PHI and HNZ currently jointly own PHI HNZ Australia Pty Limited, on 50%-and-50% basis. HNZ’s New Zealand, Australia operations contributed 47% of the total revenues for the Six-month period ended June 30, 2017.

“We are pleased with the strategic review process that has led to this important transaction, which we believe to be in the best interests of the Corporation and its shareholders,” said Larry Pollock, Chairman of the Board of Directors of HNZ.

Holders of approximately 19.24% of HNZ’s outstanding common and variable voting shares, including Sentry Investments Inc. (18.56%) and all of HNZ’s directors and executive officers that hold shares, but excluding Don Wall, have signed voting support agreements.

Fonds de solidarité des travailleurs du Québec (F.T.Q.) currently holds 2,454,434 common shares or 18.96% of HNZ total shares.

“This transaction provides significant value and liquidity for our shareholders, as well as continuity and opportunity for our employees,” said Don Wall. “I look forward to continuing the operations of the Corporation in Canada, the U.S. and Antarctica where we will continue our brand as a well-known and respected industry participant, with an excellent safety record and reputation for providing performance excellence, innovative thinking and efficient customer service.”

“This acquisition is an important part of our plan to diversify our services and international footprint,” said Al A. Gonsoulin, Chairman and CEO of PHI, Inc. “It is rare to be able to acquire a segment of a company with whom you have such a strong working relationship as well as deep professional and personal regard. Together, PHI and HNZ bring a unique approach and skill to the discerning international customer. We look forward to what this will mean for our company and for those we serve.”

TD Securities Inc. acts as financial advisor and Fasken Martineau DuMoulin LLP serves as legal counsel to the Special Committee. McCarthy Tétrault LLP serves as legal counsel to HNZ. Chaffe & Associates, Inc. serves as financial advisor to PHI and Blake, Cassels & Graydon LLP and Jones Walker, LLP serve as legal counsel to PHI. Mission Capital Group Inc. serves as financial advisor to Don Wall and Burnet, Duckworth & Palmer LLP serves as legal counsel to Don Wall and the Canadian Purchaser.

HNZ Group Inc. is an international provider of helicopter transportation and related support services with operations in Canada, Australia, New Zealand, Antarctica, the United States and Southeast Asia. HNZ operates in excess of 115 helicopters to support offshore and onshore charter activities under a number of different brands. In addition to charter services, it provides ancillary services which include third-party repair and maintenance services and advanced flight training by the internationally recognized HNZ Topflight training center in Penticton, British Columbia. HNZ is headquartered near Montreal, Canada and employs approximately 600 personnel from 36 locations around the world.

PHI, Inc. is one of the world’s leading helicopter services companies, operating over 230 aircraft in over 85 locations around the world. PHI offers services to the offshore Oil and Gas, Air Medical applications, and Technical Services applications around the world. In addition to operations in the United States, the company has operated in 43 foreign countries and continues to operate for customers across the globe. PHI’s Headquarters are in Lafayette, Louisiana USA and PHI employs approximately 2,300 personnel globally.

photo credit: HNZ Group Inc.