ATSG to Repurchase $50 Million of its Common Shares
June 22 2016 - 8:30AM
Business Wire
Air Transport Services Group, Inc. (NASDAQ:ATSG) announced today
that it has agreed to repurchase $50 million of its common shares
at $13.07 per share, representing approximately 3.8 million shares,
from its largest shareholder, a fund affiliated with Red Mountain
Capital Partners LLC. The shares purchased represent approximately
6 percent of ATSG’s outstanding shares.
The transaction was approved by the Board of Directors of ATSG
after market close on June 20, with the pricing set based upon a
discount to share activity through market close on that date.
The $13.07 transaction price compares with a closing price of
ATSG shares of $13.28 on June 20, 2016. It is a discount of 2.5
percent and 6.2 percent, respectively, from volume-weighted average
prices of $13.41 for the 10 trading days and $13.93 for the 60
trading days prior to the June 20 closing price. ATSG’s stock
closed at a price of $13.17 per share yesterday.
Red Mountain is an investment management firm based in Los
Angeles, Calif., with approximately $480 million in discretionary
assets under management as of March 31, 2016. Its affiliated fund
has been a shareholder of ATSG since 2006. It will continue to hold
approximately 11 percent of ATSG shares outstanding following the
transaction.
J. Christopher Teets, a partner of Red Mountain and a director
of ATSG, said, “Management’s outstanding execution has caused our
investment in ATSG to grow to in excess of 30 percent of our assets
under management. Accordingly, we were prepared to trim our
position in order to accommodate ATSG’s repurchase objectives. We
look forward to continuing to work with the management team and the
Board as ATSG embarks on its next phase of exciting growth."
Quint Turner, Chief Financial Officer of ATSG, said the
transaction is a positive development for the company and for its
shareholders. It is consistent with ATSG’s stated goal to
significantly reduce the dilutive effect of warrants issued to
Amazon for up to 19.9 percent of its shares in connection with new
commercial arrangements.
“Like Red Mountain, many of our investors continue to share our
confidence in the growth and earnings potential of ATSG and its
businesses, which makes this transaction a good deal for ATSG and
its shareholders,” Turner said. “We are pleased that Red Mountain
continues as a major shareholder of the company, and look forward
to their continued contributions as ATSG executes its strategic
plans. Drawing upon our growing operating cash flow and significant
balance sheet liquidity, we will continue to repurchase shares on a
more moderated basis, as we also invest in our midsized freighter
fleet to support our customers.”
About ATSG
ATSG is a leading provider of aircraft leasing and air cargo
transportation and related services to domestic and foreign air
carriers and other companies that outsource their air cargo lift
requirements. ATSG, through its leasing and airline subsidiaries,
is the world's largest owner and operator of converted Boeing 767
freighter aircraft. Through its principal subsidiaries, including
two airlines with separate and distinct U.S. FAA Part 121 Air
Carrier certificates, ATSG provides aircraft leasing, air cargo
lift, aircraft maintenance services and airport ground services.
ATSG's subsidiaries include ABX Air, Inc.; Airborne Global
Solutions, Inc.; Air Transport International, Inc.; Cargo Aircraft
Management, Inc.; and Airborne Maintenance and Engineering
Services, Inc. For more information, please see www.atsginc.com
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version on businesswire.com: http://www.businesswire.com/news/home/20160622005736/en/
ATSG Inc.Quint O. Turner, Chief Financial
Officer937-366-2303
Air Transport Services (NASDAQ:ATSG)
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