• Globally, the helicopter industry is very attractive

    • Moderately high margins of 22-24% on EBITDA with non-cyclical revenues

    • Highly consolidated country markets where market share leaders can be found in the mid-cap size segments

 

  • In Asia, Thailand and Malaysia are the most promising markets to consider

    • Sustainable growth in demand expected due to large oil & gas companies concerns in vast gas fields offshore from the two countries

    • Respective markets are highly concentrated dominated by only two to three players

 

  • The identified four potential targets have strong competitive positions in their respective markets

    • These companies are market share leaders or strong followers

    • Operationally, companies appear solid with strong management in place

 

  • We can consider a copycat deal in Asia, but we will need to have a clear view of the exit strategy.  Lack of deals in Asia represents an opportunity for us to lead. On the other hand, we need to carefully evaluate and assess viable exit scenarios.  Based on a global analysis of private equity and M&A transactions in the helicopter sector, several themes become apparent.

 

  • Globally, private equity players have been pursuing a consolidation strategy especially in Europe

    • For example, KKR made a series of private equity investments into several companies (i.e. Inaer Aviation Group, Bond Air Services etc.) across Europe under holding company Avincis Group as part of buy-and-build strategy

 

  • In Asia, however, this trend has yet to take hold.  Only one deal has been transacted in the market without an exit yet

    • KKR bought a 30% minority stake in Weststar Aviation Services (Malaysian company) for US$202m in 2013

 

  • Yet, Houghton Street Partners can lead in this segment due to our team’s existing strong track record in this segment

 

  • Careful consideration of an exit strategy needs to be considered upfront.  Preliminary suggestions in order of priority are the following:

    • IPO – KKR is looking to exit Weststar via IPO in 2014 or 2015

    • Secondary Sale to Global PE Funds (KKR, Blackstone) – nice overlap of large-cap entry and mid-cap exit

    • Strategic Sale – Strategic players (HHZ Group, Bristow) could be looking to strengthen position in Southeast Asia 

 

Offshore Helicopters in Asia

Acquisition Research

Uncovering Buyout targets in the offshore helicopter services industry in Asia

Download

To download the full version, click here.

 

To view online, click here.