ATSG to go private in $3.1B deal

New York City-based investment firm Stonepeak has agreed to purchase ATSG, parent of the world's largest freighter aircraft lessor, CAM, for about $3.1 billion. The two parties expect to close the transaction in the first half of 2025, they announced in a joint release today. [caption id="attachment_57146493" align="aligncenter" width="1200"] ABX Air is one of three airlines under ATSG. (Courtesy/ABX Air)[/caption] The deal will “deliver immediate and certain cash value to ATSG’s shareholders at a substantial premium,” ATSG Executive Chairman Joe Hete said in the release. The acquisition will yield ATSG a premium of almost 30% over its stock price of $17.40 per share as of Friday’s closing, according to the release. ATSG shares were trading at $21.98 as of 4 p.m. (EST) after opening at about $22.04 today. Stonepeak is confident in ATSG’s “trajectory as a sector leader” and will support ATSG to “take the business to the next level as a private company,” the company said in the release. It cited ATSG’s role in the growth of global e-commerce, its “deep relationships with some of the world’s largest e-commerce companies and integrators” and its fleet. The investment company specializes in infrastructure and real assets with approximately $70 billion of assets under its management, according to Stonepeak. Acquiring ATSG will give Stonepeak its first airline ownership stake, with ATSG subsidiaries Air Transport International, ABX Air and Omni Air International. Stonepeak declined to comment on how long it had been looking at ATSG and its plans for the company. New leadership ATSG “needs to continue to evolve,” Chief Executive Mike Berger said during a fireside chat at Cargo Facts Symposium last month , adding that President Jeff Dominick and Chief Commercial Officer Todd France “are new parts of the leadership that are going to help us get there.” The group appointed France as chief commercial officer in August and Dominick as president in June, when Berger became CEO . Dominick has a background in finance and Wall Street connections, having worked at firms including Barings and BlackRock. ATSG appointed Berger to replace interim CEO Joe Hete, who was brought on in November 2023 after the group removed Rich Corrado as part of an organizational restructuring to improve its finances. Major customers ATSG’s three largest customers are Amazon, the United States Department of Defense and DHL, representing 32%, 31% and 13% of the group’s consolidated revenue in the first half of 2024, according to its second-quarter 10-Q filing. CAM’s aircraft under lease to external customers were worth approximately $1.7 billion as of June 30, according to the filing. CAM owned 136 aircraft as of that date, including ninety-four 767 freighters and three A321-200PCFs in service. Fourteen 767-300Fs and one 767-200BDSF were on lease to DHL as of June 30, while thirty 767 freighters were on lease to Amazon, according to the filing. Air Transport International and ABX Air also operate 767s on a CMI basis for Amazon and DHL. Most recently, ATSG and Amazon agreed to place at least ten 767-300 freighters with ABX, which operated the first flight in July . ABX will operate ten of those 767s by peak season, for a total of fifty-one freighters ATSG operates on behalf of Amazon, Berger said during the fireside chat at CFS. What’s next ATSG sees its future in A330 conversions, Berger said. CAM expects to receive its first A330-300P2F (349) by yearend and will lease it to Turkey-based ULS Airlines Cargo . It also owns four other A330-300s and one A330-200, including an ex-China Airlines A330-300 (641) that it purchased in October. Meanwhile, CAM leased its first two A321-200PCFs to Raya Airways and one to Global Crossing Airlines in 2023. ATSG reported $488 million in revenue in Q2 and cut its expenses by 64% year over year to $70 million, Chief Financial Officer Quint Turner said in the company’s Q2 earnings call in August. The group expects an adjusted EBITDA of $526 million for 2024, Turner said during the call. ATSG will report its Q3 results Friday but will not conduct an earnings call, it said in today’s release. ATSG follows Atlas Air in going private. That group was acquired in March 2023 for $5.2 billion by a consortium led by Apollo Global Management . Since the acquisition Atlas has invested heavily in growth in the large-widebody segment .

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