Stonepeak Set to Acquire ATSG in $3.1 Billion Deal
A significant development is taking place in the aviation sector. Investment firm Stonepeak is nearing an agreement to acquire Air Transport Services Group (NASDAQ: ATSG), a leading aircraft leasing and cargo services provider. The value of the transaction, including debts, is estimated to be approximately $3.1 billion. Sources close to the matter revealed on Sunday that the New York-based firm plans to offer $22.50 per share for ATSG, which translates to a premium of about 30% based on the company’s closing price on Friday.
If ongoing discussions are successfully concluded, an official announcement of the deal is expected as early as Monday. However, both Stonepeak and ATSG have not responded to requests for comments regarding the matter at this time.
This strategic acquisition occurs at a time of increasing demand for air cargo transportation, largely driven by the growth of online shopping and the need for expedited delivery services by both online and traditional retailers. Companies like Temu and Shein have contributed to the surge in online shopping traffic, highlighting the significance of air cargo in corporate logistics. This trend has made cargo operators like ATSG more attractive as potential acquisition targets.
Founded in 1980 as Airborne Freight Corporation and based in Wilmington, Ohio, ATSG was rebranded after DHL acquired Airborne's ground operations in 2003, continuing its air and aircraft maintenance operations as ATSG. The company has a significant customer base, including Amazon (NASDAQ: AMZN), and is recognized as a leading lessor of medium-sized cargo aircraft. ATSG's fleet includes 134 aircraft, featuring Boeing (NYSE: BA) 767 and Airbus A321 jets, and offers a variety of services such as air cargo transportation and aircraft maintenance. The company currently employs approximately 5,300 people.
In its most recent quarter ended June 30, ATSG reported an 8% decline in revenue to $488 million and a pre-tax loss of $7 million due to major customers reducing their aircraft leasing activities. However, ATSG anticipates that demand will rebound in subsequent quarters as economic conditions improve. The company is expected to announce its third-quarter earnings on Friday.
Stonepeak, which manages approximately $70 billion in assets and primarily invests in infrastructure and real estate, has notable acquisitions. Last year, the firm acquired container lessor Textainer Group in a deal valued at $7.4 billion. Stonepeak is also an investor in Lineage, a cold storage operator that went public in July after its initial public offering in New York.