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CD&R to invest up to $600m in flying services business CHC Group

26 Aug 2014

coast-guard-helicopter-902078-mPrivate equity firm Clayton, Dubilier & Rice has agreed to invest $500m in offshore for a 45 per cent stake in flying service provider CHC Group.

CD&R will inject capital into the company by buying convertible preferred shares which CHC will issue in a private placement.

CHC provides offshore flying services to oil and gas companies through one of its subsidiaries CHC Helicopter.

The division uses one of the industry’s largest fleets of heavy and medium commercial helicopters from approximately 70 bases on six continents.

As part of the deal CHC hopes to offer $100m worth of convertible preferred shares to existing shareholders.

Any shares that are not bought will be picked up by CD&R which could bring the firm’s total capital commitment to $600m, giving it a bigger stake in the business.

Four CD&R team members will join the board of CHC including operating partner John Krenicki who will chairman as part of the deal.

CHC plans to use the money primarily to reduce debt and other fixed charges.

CD&R partner Nathan Sleeper said, “We are pleased to be investing in an industry leader and playing a constructive role to make sure CHC can capitalise fully on the favourable trends in the energy services sector, including oil-and-gas exploration and production continuing to move farther into deepwater and ultra-deepwater locations.”

CHC has approximately 4,500 full-time employees and reported $1.8bn in total revenue and EBITDAR of $471m for its fiscal year 2014 as of April 30.

Earlier this year CD&R agreed to buy chemicals group Ashland’s water technologies unit for $1.8bn.

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