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Exchange Income Corporation (EIC) announced it has entered into an agreement to acquire CANLink Global Inc. (Moncton Flight College) for a purchase price of approximately $35 million, subject to customary post-closing adjustments, which can increase to $55 million if post-closing growth targets are met.
The transaction is expected to close within the next 30 days.
Moncton Flight College (MFC) is the largest flight training college in Canada, having trained over 19,000 students since its inception.
MFC offers domestic Canadian pilot training as well as a foreign pilot program. Domestically, it offers a full range of training, from private pilot licensing to commercial pilot programs, which include an Integrated Commercial Pilot Program, a Diploma in Aviation Technology Pilot Program and a four-year Bachelor of Science/Pilot Program with Mount Allison University.
MFC currently operates with approximately 160 employees, including over 90 flight instructors out of two campuses located in Moncton and Fredericton, N.B.
Having a long-standing reputation as a best-in-class flight school, MFC provides a unique opportunity as an internal avenue for pilot recruitment and retention for EIC’s aviation companies while supporting the domestic and foreign commercial pilot aviation industry demands.
The impact of an increased pilot demand is global in nature and airlines have been taking action to secure their own pilot streams. Internationally, it is estimated there will be a demand for approximately 615,000 pilots by 2035.
The initial base purchase of $35 million will be funded by the issuance of EIC common shares to the vendors representing $6 million and the Corporation’s available cash resources from its currently available credit facility representing approximately $29 million, which is based on MFC having generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $7.6 million in 2017.
If the post-closing targets are met, the purchase price will increase to $55 million, which would also result in the transaction being more accretive to EIC.
“The acquisition of Moncton Flight College is extremely exciting. Not only is it an accretive acquisition, it provides EIC with unique ability to address the pilot recruiting and retention issue. I believe that this strategic acquisition will support our future growth and operational requirements of our airline and aerospace portfolio,” said Mike Pyle, chief executive officer of EIC.
“We are pleased to welcome Moncton Flight College to the EIC family and excited about the additional market opportunities that this will provide our organization.”
Mike Tilley, chief executive officer of MFC, and the senior management team are staying to operate the business moving forward under the new ownership of EIC.
“Moncton Flight College has grown from a flying club founded in 1929 into an international industry leader within the flight training industry,” said Tilley. “I am proud of what Moncton Flight College has accomplished over our history, and we feel joining EIC will allow us to continue to capitalize on market demand while assisting the EIC family of companies to meet their own requirements.”
“Moncton Flight College is a well-established training organization that we are excited about leveraging to expand our aerospace service compliment to include training,” continued Brian Chafe, CEO of PAL Aerospace. “We are excited to be adding this team to PAL Aerospace as we continue to open new markets and grow our capabilities.”
