First Reserve Corporation  has entered into an agreement to acquire CHC Helicopter Corporation (CHC), the world's largest provider of helicopter services to the global offshore oil and gas industry.

First Reserve is a leading private equity firm that specialises in the energy industry.

CHC and First Reserve believe that the all-cash transaction, which values the company at an adjusted enterprise value of Canadian $3.7 billion ($3.65), is the largest-ever buyout in the oilfield services industry.

“I’m glad to see that First Reserve recognised the value that was created in CHC over the years, and was able to translate that value into a fair offer for all shareholders. I’m also very pleased to see that First Reserve will carry on CHC’s legacy of entrepreneurship, as it builds upon CHC’s position as a world class helicopter company,” said CHC’s chairman of the board Mark Dobbin.

“This partnership will help us realize our growth potential,” said president and CEO of  CHC Sylvain Allard. “First Reserve is an investment company with deep knowledge of the energy industry and views CHC as a great investment platform. First Reserve has strong conviction in the merits of the strategy that has led to CHC’s success and will work in partnership with us to continue to execute that same plan and achieve our long-term objectives.”

Under the terms of the transaction, an affiliate of the First Reserve fund will acquire all outstanding Class A Subordinate Voting Shares and all of the outstanding Class B Multiple Voting Shares of CHC for Canadian $32.68 per Class A Share and Class B Share for an aggregate consideration of approximately Canadian $1.5 billion.

Following completion of the transaction CHC’s Class A shares and Class B shares will be de-listed and no longer traded publicly. CHC’s headquarters will remain in Vancouver, Canada.

The board of directors of CHC has unanimously approved the entry by CHC into the agreement and recommends that shareholders vote in favour of the transaction.

Merrill Lynch Canada Inc. and Scotia Capital are financial advisors to CHC. Ogilvy Renault LLP and DLA Piper USA LLP are legal counsel to CHC. Simpson Thacher & Bartlett LLP, Blake, Cassels & Graydon LLP and Slaughter and May are legal counsel to the First Reserve fund.

The transaction will be completed through a plan of arrangement under the provisions of the Canada Business Corporations Act, subject to the approval of the Supreme Court of British Columbia.  Shareholders will be asked to approve the transaction at a special meeting of shareholders, to be called as directed by the Court. 

Details of the special meeting will be announced shortly.  It is anticipated that a proxy circular will be prepared and mailed to shareholders in the month of March providing shareholders with important information about the transaction.  Shareholders are urged to read the proxy circular once it is available. – TradeArabia News Service