Shareholders of Ottawa-headquartered operator Canadian North have entered a binding agreement to sell the airline to Exchange Income Corporation (EIC) for C$205 million ($143 million).
The agreement to sell Bradley Air Services, which operates as Canadian North, was disclosed on 24 February by shareholders Makvvik Corporation and Inuvialuit Development Corporation.
Pending regulatory approvals and “other customary closing conditions”, the sale includes C$10 million of EIC shares and C$195 million in cash from EIC’s credit facility.
Canadian North flies passengers and cargo from its gateways in Edmonton and Ottawa to remote reaches of Nunavut and the Northwest Territories, serving 24 communities that depend heavily on air transportation. It operates a fleet of Boeing 737s and ATR turboprops.
EIC describes itself as a ”diversified, acquisition-oriented company focused on opportunities” in aviation and aerospace manufacturing. It will add Canadian North to its stable of Canadian passenger and cargo operators, which includes Manitoba-based Calm Air, Newfoundland’s PAL Airlines and a pair of Winnipeg-based companies – Perimeter Aviation and Keewatin Air.
”The acquisition of Canadian North provides EIC with a unique opportunity to acquire a Northern airline that operates in adjacent regions and on highly complementary routes to those serviced by EIC,” it says.
The company asserts that the networks of the two companies are “highly complementary”.
”Canadian North provides passenger and cargo services in the eastern and western regions in Nunavut, while EIC’s subsidiary Calm Air services the central region,” EIC says. ”Canadian North is also active in the Northwest Territories, where EIC has no passenger or cargo presence.”
Notably, EIC says it will cease later this year service between Montreal and Kuujjuaq, Quebec – a route that will be handled by Makvvik, operating as Air Inuit.
Existing bookings for travel on the Montreal-Kuujjuaq route after 1 October will be transferred from Canadian North to Air Inuit.
“Air travel in this region is truly an essential service,” EIC says of far-northern Canada. ”There is no road access to Nunavut from the rest of Canada and the introduction of roads will be highly unlikely in the foreseeable future.”
Canadian North, for its part, says it will retain much of its former identify following the completion of its deal with EIC.
”Within this transaction, Canadian North retains our brand and leadership team, and most importantly, our mission to make life better in the communities we serve,” the airline says.
