8-K: Air Transport Services Group Completes Acquisition by Stonepeak for $3.1 Billion

Air Transport Services Group (ATSG) has finalized its acquisition by Stonepeak in a $3.1 billion all-cash transaction, transitioning to a private company.

Summary

• Air Transport Services Group, Inc. (ATSG) has been acquired by Stonepeak in an all-cash transaction valuing the company at approximately $3.1 billion.
• The merger was completed on April 11, 2025, with ATSG becoming a wholly-owned subsidiary of Stonepeak Nile Parent LLC.
• Shareholders of ATSG received $22.50 per share in cash.
• Certain members of management contributed their shares of Company Common Stock in exchange for equity interests in an indirect parent company of Parent.
• Outstanding Company RSUs, PSUs, and Restricted Stock Awards were vested and canceled, with holders receiving cash payments based on the merger consideration.
• Holders of the 3.875% Convertible Senior Notes due 2029 have the option to require the company to repurchase their notes at 100% of the principal amount plus accrued interest.
• The company has requested that NASDAQ remove Company Common Stock from listing.
• The total consideration payable to ATSG's security holders in connection with the Merger was approximately $1,465 million.
• Joseph C. Hete was reappointed as a director of the Board of Directors of the surviving company.
• The certificate of incorporation of the Company was amended and restated and the bylaws of MergerCo in effect at the Effective Time became the bylaws of the Company.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the successful completion of the acquisition, the cash payout to shareholders, and the stated commitment to future growth and value creation. The transition to private ownership is presented as a strategic move to enhance capabilities and long-term prospects.

Positives

• ATSG shareholders received a cash payment of $22.50 per share.
• The acquisition provides ATSG with Stonepeak's support and resources for long-term growth.
• Holders of the 2029 Notes have the option to have their notes repurchased for cash.
• The 2028 Notes Indenture was discharged after Parent deposited sufficient funds to fund the redemption of the outstanding 2028 Notes.

Negatives

• ATSG's common stock has been delisted from NASDAQ, reducing liquidity for former shareholders.
• The company is now a wholly-owned subsidiary of Parent, meaning less transparency.

Risks

• As a private company, ATSG will face different financial and operational pressures.
• The success of ATSG under Stonepeak's ownership will depend on their ability to execute their strategic plans.
• The New Parent Credit Agreement and the New Irish Credit Agreement include representations and warranties, covenants, events of default and other provisions that are customary for facilities of this type.

Future Outlook

With Stonepeak's backing, ATSG aims to enhance its capabilities and sustain long-term growth as a private company, focusing on delivering value for stakeholders.

Management Comments

• Mike Berger, Chief Executive Officer of ATSG, stated that the acquisition marks an important milestone and that ATSG is well-positioned to enhance capabilities and sustain long-term growth as a private company with Stonepeak's support.
• James Wyper, Senior Managing Director at Stonepeak, expressed excitement about partnering with the ATSG team to support its next chapter as a private company.

Industry Context

The acquisition reflects the ongoing trend of private equity firms investing in transportation, logistics, and asset leasing businesses, seeking to capitalize on the growing demand for air cargo and related services.

Comparison to Industry Standards

• The $3.1 billion enterprise valuation is comparable to other recent acquisitions in the aviation services and aircraft leasing sectors.
• Stonepeak's investment aligns with other infrastructure and real asset firms seeking stable, long-term returns in essential industries.
• The shift to private ownership mirrors similar moves by other companies aiming to streamline operations and pursue long-term strategies without the pressures of public markets.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders received $22.50 per share in cash.
• Employees are expected to benefit from Stonepeak's investment and support for long-term growth.
• Customers can anticipate continued service and potential enhancements under the new ownership.
• Communities where ATSG operates may see continued economic activity and job opportunities.

Next Steps

• ATSG will operate as a private company under Stonepeak's ownership.
• Holders of the 2029 Notes must decide whether to exercise their Fundamental Change Repurchase Right or convert their notes.
• NASDAQ will file a notification of removal from listing of Company Common Stock on Form 25 with the SEC.
• The Company intends to file a Form 15 with the SEC to terminate the registration of Company Common Stock under Section 12 of the Securities Exchange Act of 1934, as amended (the Exchange Act), and suspend the Company's reporting obligations under Sections 13 and 15(d) of the Exchange Act following the effectiveness of such Form 25.

Key Dates

Keywords

acquisition, merger, Stonepeak, ATSG, Air Transport Services Group, aircraft leasing, freighter, NASDAQ, delisting