Onex Corporation an investment management firm based in Toronto that manages the capital of its investors will complete its buyout of WestJet Airlines a Calgary based aviation company that flies only commercial fights to more than 100 destinations.
The price of the deal has been set at $3.8 billion including the debt of the airlines’ company. The Canadian Transportation Agency cleared the approval for the deal recently.
According to a statement released by Onex Corporation on 11th December, the shareholders of WestJet Airlines will receive 31 Canadian Dollars per share during the buyout. But the quarterly dividend of 14 cents per share won’t be given as the deal was completed before the 18 December deadline date.
The full details of the private equity deal have not been disclosed by Onex Corporation so far. But according to reports, the total equity investment done by Onex Corporation alone stands roughly at 345 million Canadian Dollars. An affiliate company called Kestrel Bidco formed by Onex will own all the shares of WestJet once the deal closes.
In July Kestrel Bidco said that it was in need of $2.4 billion in debt to fund the buyout of WestJet Airlines.
The change in ownership is welcoming news for the Canadian aviation company as it looks forward to expanding its plans and start new routes to the US and Europe thereby increasing its profits. It will now operate under a clear and transparent structure as it will be managed by a private firm.
Its shares will be delisted from the Toronto Stock Exchange within a few trading days once the deal is done.
Onex has been spending months with the regulators to coordinating and trying to complete all the formalities as fast as possible to get the required approvals since May this year. It is estimated that WestJet will have a net revenue of 5.1 billion Canadian Dollars this year and has projections of 5.37 billion Canadian Dollars for 2020.
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