Bearskin Airlines, one of Northern Ontario's transportation icons, has signed a letter of intent to sell its operations and assets to the Manitoba-based Exchange Income Corporation (EIC) in a $32.5-million deal.
As a privately owned commuter airline providing passenger service in Ontario and Manitoba, EIC will primarily fund the deal through debt financing. Ten per cent of the purchase price will be paid through the issuance of shares in EIC.
Bearskin owners Harvey and Cliff Friesen, president and executive vice-president respectively, will continue on in their current roles at the company following the completion of the acquisition.
“[Exchange Income Corporation's] track record with their other aviation companies was a key driver in our decision to sell,” said the Friesens in a release. “It is a rare combination to find a buyer that has the access to capital that EIC brings yet still enables us to keep our core culture and values that have driven this company to its current level of success.”
No changes to Bearskin's existing labour force is expected, while “key members of Bearskin management” will be retained through long-term employment contracts.
The transaction is expected to close in the fourth quarter, following final due diligence and other various conditions.
Other airlines currently under EIC's aviation segment include Permieter Aviation LP, Keewatin Air LP and Calm Air International LP.
“The acquisition of the business of Bearskin Airlines will help to accelerate the next phase of our growth and is strategic on a number of levels,” said Mike Pyle, president and CEO of EIC. “Most notably, it allows our aviation segment to expand its operations into select markets in northwestern Ontario that are generally under-served, including Thunder Bay, Sioux Lookout, Kenora and Dryden.”
Founded in 1963, Bearskin generated $47 million last year, with more than 100 scheduled daily flights to 17 destinations. Its major hubs include Thunder Bay, Sudbury and Winnipeg.
