Rowan to Sell Era Aviation
|Thursday, October 14, 2004
Rowan Companies announced an agreement to sell 100% of the common stock of Era Aviation, Inc., a wholly-owned subsidiary of Rowan, to SEACOR Holdings Inc. The purchase price is approximately $118.1 million in cash, subject to post-closing working capital adjustments. The transaction is expected to be completed within 30 to 60 days, subject to customary regulatory reviews.
Era is a leading provider of helicopter services for oil and gas operations in the Gulf of Mexico and Alaska and also conducts firefighting, flightseeing and utility activities in the Western U.S. and Alaska. Era also operates a fixed wing commuter airline and charter business in Alaska. Era employs approximately 900 personnel and owns a fleet of 81 helicopters and 16 fixed wing aircraft.
Danny McNease, Rowan's Chairman and Chief Executive Officer, commented, "As previously reported, we have been actively reviewing strategic options for our aviation operations for the past several months, including a sale of the business. We have determined that the sale of Era will better allow Era to focus on growing its customer and asset bases while continuing to provide the quality service for which it has become known. It will also allow Rowan to exit a non-core business and concentrate management's efforts on improving results from its contract drilling and manufacturing businesses. With SEACOR's reputation for quality operations and excellent management, we are confident that Era's customers will continue to receive an excellent level of service."
Rowan intends to utilize a portion of the proceeds to make a $60 million contribution to its defined benefit pension plan and to pay a special dividend to shareholders of 25(cents) per share. The record and payment dates for the dividend will be determined later by the Company's Board of Directors.
Charles Fabrikant, SEACOR's Chairman and Chief Executive Officer, commented, "The acquisition of Era will substantially increase SEACOR's exposure to the Gulf of Mexico helicopter market. Era operates mostly twin-engine equipment, serving the drilling - "crew change" market and has large equipment that can support deep-water operations. We expect the combination of Tex-Air and Era will result in synergies. The acquisition of Era is consistent with SEACOR's recently developed plan to invest cash, previously dedicated to foreign operations, in U.S. assets.
"Era has built an excellent long-term operating and safety record - providing safe, efficient, and reliable service through the medium of high-quality equipment, and well-trained and talented personnel, factors critical to building long-term relationships with major integrated oil companies. Era's management and personnel are to be commended for building an excellent organization and performance record, and we look forward to their continuing contribution as part of the new combined operation."
Simmons & Company International served as financial advisor to Rowan for this transaction.