Stonepeak is in advanced talks for an acquisition of Air Transport Services Group (ATSG), a provider of aircraft leasing and cargo transportation services. The Stonepeak and ATSG deal is for about $3.1 billion including debt, as per people familiar with the matter said on Sunday.
Stonepeak Infrastructure Partners is nearing a buyout deal to acquire aircraft lessor ATSG. As per the report, Stonepeak would likely pay $22.50 per share for ATSG. This would be a 30% premium from ATSG’s closing stock price on Friday, the sources said.
Stonepeak ATSG acquisition
If the buyout talks conclude successfully, then the Stonepeak ATSG acquisition deal could be announced as early as Monday, the sources added.
Stonepeak and ATSG did not immediately respond to requests for comment.
Stonepeak’s buyout of ATSG lucrative
The booming e-commerce sector, driven by companies like Temu and Shein, has heightened demand for air cargo as retailers strive to expedite delivery times. This trend enhances the appeal of freight operators like ATSG, turning them into attractive acquisition targets.
ATSG’s strong customer base
Founded in 1980, ATSG traces its roots to an express freight operator known as Airborne Freight Corporation. In 2003, DHL acquired Airborne’s ground operations, excluding the airline and aircraft maintenance operations that eventually became ATSG.
The Wilmington, Ohio-based company, which counts online retailer Amazon as one of its key customers, is a leading lessor of mid-sized freighters, with a fleet of 134 aircraft that includes Boeing 767 and Airbus A321 jets.
It also provides air cargo transportation and aircraft maintenance services to domestic and foreign airlines and currently has 5,300 employees, according to its website.
ATSG’s revenue
For the quarter ended June 30, ATSG reported an 8% decline in revenue to $488 million and swung to a pretax loss of $7 million, as some key customers leased fewer aircraft. The company said it expects a pickup in demand in the coming quarters as macroeconomic conditions improve.
ATSG is scheduled to report its third-quarter earnings on Friday.
Stonepeak’s assets
New York-based Stonepeak, which primarily focuses on the infrastructure and real estate industries, has about $70 billion of assets under management, according to its website.
Last year, Stonepeak agreed to acquire container lessor Textainer Group in a deal with an enterprise value of $7.4 billion. Stonepeak is also an investor in cold storage warehouse operator Lineage, whose shares started trading in New York following the company’s initial public offering in July.
Stock update
Futures connected to the Dow Jones Industrial Average lost 0.2%, or 90 points. S&P 500 futures and Nasdsq-100 futures edged lower. ATSG stock closed a bit higher at a price of $17.40 UP 0.93%.
