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Onex to fly off with WestJet
Posted on Tuesday, 14 May 2019 10:16
Private equity firm Onex is buying Canadian airline WestJet for CAD 5.00 billion (USD 3.31 billion), including assumed debt.

The acquiror is offering CAD 31.00 per share, representing a premium of 67.4 per cent to the Toronto-listed target’s closing price of CAD 18.52 on 10th May, the last trading day prior to the deal being announced.

Subject to regulatory approvals, including clearance from the Minister of Transport under the Canada Transportation Act, the transaction is expected to close in late 2019 or early 2020.

Westjet’s board has unanimously recommended that shareholders vote in favour of the deal.

Upon completion, the target will operate as a privately-held company.

Established in 1996 and headquartered in Calgary, WestJet comprises three different aircraft types and flies to over 100 destinations across North and Central America, the Caribbean and Europe.

The airline currently has 700 flights daily, as well as 22.00 million passengers per year.

For the financial year ended 31st December 2018, WestJet booked revenue of CAD 4.73 billion, a 5.0 per cent increase on CAD 4.51 billion in the preceding 12 months.

According to Zephyr, the M&A database published by Bureau van Dijk, the deal with Onex would represent the largest transaction targeting a scheduled passenger air transportation operator announced worldwide since the beginning of 2019.

The private equity firm first approached WestJet regarding a purchase back in March 2019, as part of which the target formed a special committee of independent directors to supervise the negotiations and terms of the acquisition.

Founded in 1984, Onex has a vast investment portfolio within the financial, healthcare, industrial and consumer and retail industries, among others.

It has around CAD 31.00 billion in assets under management, including brands such as Convex, Englobe, Galaxy Entertainment and Genesis HealthCare.

Onex is no stranger to the aerospace industry; in January 2013, along with BBAM, it invested USD 25.00 million into Dublin-based aircraft leasing company Fly Leasing.

Zephyr shows that 99 deals targeting scheduled air transportation operators have been announced so far this year, with Onex’s WestJet takeover being the largest.

The second-biggest involved the government of the Netherlands increasing its stake in France’s Air France-KLM from 5.9 per cent to 12.7 per cent for EUR 680.00 million.

© Zephus Ltd