Erickson Air-Crane said Monday it is moving forward in its acquisition of a Brazilian helicopter firm that does business in South and Central American gas and oil fields.
The Oregon-based heavy-lift helicopter company said it would pay HRT Participacoes em Petroleo, headquartered in Rio de Janeiro, between $65 million and $75 million by the time the deal for its aerial services unit, Air Amazonia, closes in the second quarter. Erickson's primary manufacturing and maintenance complex is on Willow Springs Road in Central Point.
President and Chief Executive Officer Udo Rieder called the transaction a milestone for Erickson Air-Crane as it expands into the fast-growing Latin America oil and gas markets.
"Our experience in that market has brought us nonseasonal, profitable revenue streams and illustrated significant expansion opportunities," Rieder said in a statement.
Under terms of the agreement, after purchasing the helicopter unit, Erickson will have a three-year aerial services contract with HRT, receiving approximately $50 million annually. There is also an option for three additional years.
At present, Erickson operates a fleet of 18 S-64 Aircranes. The deal will add 14 helicopters, including five Bell 212s, seven Sikorsky S-61s, and two Helibras AS350s. The HRT contract will require only a portion of Air Amazonia's fleet, Erickson said, leaving significant equipment to be used with other customers in the region, including Peru, and elsewhere.
Erickson now ships its heavy-lift Sikorsky helicopters via air cargo and ocean freighters to clients' locations. The purchase will not only expand Erickson's fleet to include medium-lift copters but also give it access to a thriving market.
"We couldn't build an operation like this quickly," Rieder told industry publication Rotorhub during the Heli-Expo in Las Vegas. "They've got an operation that, within the Amazon jungle, in a matter of a year-and-a-half, has drilled 10 oil wells. It's an operation that runs very well. It's an operation that's efficient. And we converged on it because we can . . . have something very exciting that we can then expand on."
For the first time, he said, Erickson will have the capability to carry passengers, as well.
Separately, Erickson said it has secured a credit line of $165 million from a bank syndicate led by Wells Fargo Bank. It consists of a $115 million term loan and a revolving line of up to $50 million. Erickson's existing credit agreement consists of a $65 million term loan and a revolving line of up to $67.5 million.
Erickson said it will repay $15 million on subordinated notes, and to finance corporate development — including the HRT deal — with its news line.
Reach reporter Greg Stiles at 541-776-4463 or email@example.com. Follow him on Twitter @GregMTBusiness.