Offer made for Discovery Air
Clairvest Group Inc. seeks to buy all shares of company that owns Air Tindi, Great Slave Helicopters
Shane Magee
Northern News Services
Friday, March 10, 2017
SOMBA K'E/YELLOWKNIFE
An offer has been made to purchase Discovery Air Inc., which owns Air Tindi, Discovery Mining Services and Great Slave Helicopters.
An Air Tindi plane at the Whati airport in January. The Yellowknife-based airline is owned by Discovery Air, which is now subject of a proposed purchase by a Toronto private equity management firm. - Shane Magee/NNSL photo |
Toronto-based private equity firm Clairvest Group Inc. announced investment funds it manages along with unnamed others have made an offer, which is being considered by Discovery's board of directors.
Clairvest already holds about 86 per cent of Discovery's stock and much of its third-party debt.
The proposed purchase would see Clairvest buy the remaining 11 million shares for 20 cents each, according to a news release issued Wednesday.
While the terms haven't been finalized, the buyers state they aren't willing to pay a significantly higher price and don't want to sell their interest in Discovery.
Discovery acknowledged in a news release on Monday that it received a purchase proposal. It stated there's no assurance it will go through.
Discovery Air did not respond to an interview request.
It's not clear how a purchase could impact Discovery's companies and employees in the North.
Air Tindi flies scheduled and chartered passenger flights, cargo flights, and together with Advanced Medical Solutions, has the eight-year medevac contract with the territorial government.
Great Slave Helicopters has been involved in forest fire suppression efforts and other government contract work.
In 2006, Discovery purchased Air Tindi for $20 million in cash and stocks and Great Slave Helicopters for $120 million in cash and stock. Adam Bembridge, who co-owned Great Slave Helicopters at the time of the 2006 deal, told Yellowknifer last year the sale was viewed as a lottery ticket - one that didn't pay off.
Since the sale to Discovery, its stock price has tumbled about 99 per cent.
Discovery was founded in 2004. In 2009, it received a $34 million loan from the GNWT which included a requirement to move its head office to Yellowknife.
Clairvest made a $70-million investment in Discovery in September 2011.
"We see in Discovery Air an undervalued company with significant market share in its various market verticals, strong management and tremendous expansion opportunities," Clairvest co-CEO Ken Rotman stated at the time.
It increased its ownership in December last year.
Discovery was trading at 40 cents per share on the Toronto Stock Exchange yesterday, up from below 20 cents last month.
