(St. John’s, NL: 16 Nov. 2014) Provincial Aerospace said Wednesday it has reached an agreement that would see its parent company, the PAL Group of Companies, sold to Winnipeg-based Exchange Income Corporation (EIC).
Under the terms of the deal, the PAL Group — whose holdings involve an airline, a fleet of 30 aircraft and defence and aerospace interests — will continue to be operated independently under its current management at its headquarters in St. John’s.
“This marks the launch of our next phase of growth,” Brian Chafe, CEO of the PAL Group of Companies, said in a statement. In a separate statement, Exchange Income Corp. said it was buying PAL for a combination of cash and stock worth about $246 million. Speculation about a pending sale has been the talk of the aviation community for some time. When CBC News asked late last month about the rumours, Derek Scott, vice-president of program development, said he was “not aware” of any plans to sell the company.The company currently employs 900 people.
Late last month, the company announced it had signed a so-called “teaming agreement” with aerospace giant Airbus Defence and Space to pursue a lucrative contract to replace this country’s aging fleet of fixed-wing search and rescue aircraft.
Chafe said the new owners are “committed to supporting our continued growth at home in Newfoundland and Labrador,” as well as nationally and internationally. “EIC’s support will enable us to pursue large-scale contracts, such as Canada’s fixed-wing search and rescue program. We look forward to a very bright future,” added Chafe.
The new owners plan to grow PAL’s infrastructure and employee base in this province, said Mike Pyle, the CEO of EIC. “PAL has built a labour force that is as good as any we have ever seen, so we are delighted with this acquisition,” said Pyle. In an interview Wednesday with CBC News, Pyle said PAL’s management team and workforce is a “perfect fit” for EIC, which is a publicly traded company with annual revenues in excess of $1 billion.
“We don’t buy damaged companies,” said Pyle.”We buy strong performing companies and then hopefully give a little extra access to capital and those kinds of things to enable them to grow perhaps a little faster than they could under private ownership.”
EIC owns subsidiaries in three areas — aviation, manufacturing and infrastructure. Pyle said the corporation’s motto is “don’t change the culture of the company you buy.” PAL is also a key partner with the Innu Nation of Labrador, with which it jointly owns Innu Mikun Airlines.
The airline services the coastal communities of Labrador. The leadership of the Innu Nation said they are supportive of the sale. “We welcome EIC as our new partners and are very encouraged by their confidence in the staff and leadership at Innu Mikun Airlines,” Luke Rich and Greg Pone, co-CEOs of Innu Development LP (IDLP), said in a joint statement.
The St. John’s International Airport Authority is also supportive of the deal. “I am pleased to learn that they are committed to growing PAL’s presence at St. John’s International Airport,” said Keith Collins, the authority’s president and CEO.