Houston helicopter companies complete merger

ERA and Bristow, have completed their all-stock merger. The deal was first announced in January 2020.

Both companies have their head office in west Houston and both were publicly traded until Bristow filed for bankruptcy in May 2019. The combined company will keep the Bristow name but will now trade under a new ticker symbol ‘VTOL’.



The combined group

For the year ended March 2020, Bristow had revenues of $1.2 billion and ERA $232 million. Bristow shareholders own 77% of the combined company, ERA shareholders 23 %. Technically, Bristow acquired ERA for a preliminary purchase price of $108 million. The net assets acquired were $175 million, resulted in a gain on bargain purchase of $67 million.

Since 2015, from time to time, the companies held informal discussions about a business combination. However, the bondholders who took control of Bristow in the bankruptcy reorganization really pushed the Bristow management for a merger.

The merger is expected to result in annualized cost savings of at least $35 million through the elimination of duplicate corporate expenses and greater operational efficiencies.

Management team

ERA CEO Chris Bradshaw becomes CEO of the combined group. David Stepanek, who was Senior VP of Business Development at ERA, becomes COO.  Jennifer Whalen, the CFO of ERA becomes the interim CFO. A permanent CFO will be named at a future date.

Don Miller, CEO of legacy Bristow and Brian Allman, CFO of legacy Bristow, were not named in new management team. I presume they have left the company, though that has not been explicitly stated in any SEC filings by the company.

Severance

Mr Miller will receive a cash payment of almost $3 million comprising 2x base salary ($1.4 million), target annual bonus ($0.8 million) and an incentive bonus of $750,000. Mr Allman will receive a cash payment of $1.1 million.

As a reminder, Mr Miller, who was only promoted from CFO to CEO in March 2019, got a $945,000 cash retention bonus in May 2019 and was eligible for cash bonuses (annual target $942,000). For Mr Allman, who was the Chief Accounting Officer before being promoted to CFO, the retention bonus was $400,000.

SEC filing – Bristow ERA merger completed

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