Bristow Eyeing Up To $1 Billion In Aircraft M&A As Oil Drops
Next year will be “very good,” partly because of the chance to do more mergers and acquisitions, Chief Executive Officer Jonathan Baliff, 51, said in an interview Wednesday at his headquarters in Houston. “There are a lot of M&A opportunities that are presenting themselves now and could deliver great results in calendar year 16, fiscal year 17.”
During the past year, the company has begun to acquire stakes in small regional airlines. It has a market value of $2.18 billion and had $204.3 million in cash and cash equivalents at the end of last year. Bristow’s biggest deal so far was a 2012 agreement to buy a $250 million stake in the Canadian company Cougar Helicopters.
Its largest business is transporting oil workers from shore bases to offshore production platforms in places such as the Gulf of Mexico, the North Sea and waters off the coast of Brazil. The company’s fleet accounts for about a third of the global supply of aircraft serving the oil industry.
Bristow rose 4.1 percent to $62.90 at the close in New York. The shares, which have 5 buy ratings from analysts, 3 holds and 1 sell, have dropped 14 percent in the past year.
It’s also expanding beyond the oil industry to do search-and-rescue work for the U.K. government. Transporting oil workers generates margins in the 20 percent range while search and rescue leads to margins in the low 40 percent range, Baliff said.
Bristow expects to defer capital spending next year for new aircraft and instead put that toward a dividend boost and potential additional share buybacks. The company plans to continue doubling its dividend over three to five years, he said.
“We think fiscal year 2017 is going to be a pretty good year, independent of the oil and gas market recovering significantly,” said Baliff, who took over as CEO the month after oil prices crested last year.