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[VicHockeyFan]

Victoria helicopter sold in $154 million deal
Buyer is Ontario company
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Published: Tuesday, January 30, 2007
In a deal worth more than $154 million, a Victoria-based helicopter company has been sold to a firm in Ontario.

London, Ont.-based Discovery Air struck a deal yesterday to buy VIH Aviation Group Ltd. in a cash and stock deal,

VIH Aviation, founded here in 1955 as Vancouver Island Helicopters, operates a fleet 60 helicopters and services charter markets in Western Canada and the North in forestry, oil and gas, air ambulance, mining exploration and aerial construction. The company, split into five divisions, also operates a major repair centre, corporate air terminal and fuel services at Victoria International Airport and offers transport services for oil platform workers and equipment in Halifax and St. John’s, Nfld.

VIH also operates Cougar Helicopters out of Bellingham, Wash., and has six service centres in B.C. and three in Alberta.

Discovery Air (TSX: DA.A) provides helicopter transportation and aerial firefighting support, chiefly in northern Canada. Through its subsidiary, Great Slave Helicopters Ltd., it operates a fleet of 70 light and medium helicopters and dominates the northern and central Canadian markets. The sale nearly doubles its fleet.

Discovery will pay $50 million cash and 65 million class A common shares, or about $104-million-worth of stock at current rates, and an option to buy two million Discovery class A shares at $2 each over 10 years.

Discovery shares rose more than 10 per cent to $1.62, up 15 cents, before trading on the Toronto Stock Exchange was halted at mid-afternoon yesterday. It was the highest level for Discovery stock since Oct. 16.

Ken Norie, VIH Aviation Group president and CEO, did not immediately return calls yesterday.

VIH primarily operates a fleet of heavy and crane-capable helicopters. In 2006, it had revenues of over $125 million and earnings of $10 million.

VIH Aviation’s website said the company employs 250 staff.

Wade MacBain, director of investment relations for Discovery Air, told Bloomberg News the company bought VIH Aviation to increase its presence in northern Canada, where the Victoria company has contracts to carry government workers and engage in search-and-rescue work.

VIH Aviation is considered Canada’s oldest privately held helicopter company. It was launched in April 1955 by Ted Henson with a single Bell 47 helicopter which started the company’s first season of work at Homathko River in northwestern B.C. Henson had partnered with Bill Boeing Jr., a Seattle-based bell dealer and son of the founder of Boeing Aircraft, to get the company off the ground.

Henson was killed in a 1957 crash near Tatlayoko Lake. His remains and the helicopter he was piloting were never recovered, according to a story in On Approach, the newsletter of the Victoria Airport Authority.

Henson’s wife, Lynn, operated the company for a time until she married Alf Stringer, a founder of Okanagan Helicopters. He ran the company from 1963 to 1985.

After several ownership groups and shareholders, Norie became the sole owner of VIH in the late 1990s and later acquired Northern Mountain Helicopters in B.C. and Cougar Helicopters on the East Coast to rapidly expand the company.

[Holden West]

Not so fast...

Island helicopter takeover hits turbulence
Both companies say $167-million deal has been terminated

Darron Kloster
Times Colonist

Thursday, March 08, 2007

The blockbuster aviation deal to merge Vancouver Island Helicopters with Discovery Air Inc. has been grounded.

Both sides announced late yesterday the proposed $167-million cash and share deal was terminated in the due-diligence process. The companies struck the proposal in late January and had expected to sign a formal agreement in May.

London, Ont.-based Discovery Air (TSX:DA.A) issued a statement earlier yesterday saying it wanted to either lower the price tag or scrap the deal for VIH after noting "material issues" in a review of the agreement.

A few hours later, both companies said the deal was off.

Ken Norie, chief executive and president of Victoria-based VIH Aviation Group, did not divulge details of how specifically the deal broke down. In an interview, Norie said "Price was not the issue," adding the "differences were in the vision of going forward."

The deal would have brought together two of Canada's largest helicopter companies and consolidated the fragmented Canadian niche aviation industry. Privately-held VIH Aviation, founded as Vancouver Island Helicopters in 1955, is one of Canada's largest helo companies with 60 aircraft, mostly heavy-lifters that work as aircranes in logging, oil and gas, and construction in Canada's coastal areas. Discovery operates Yellowknife-based Great Slave Helicopters, which dominates the charter market in Eastern and Northern Canada with 70 light and medium aircraft.

Discovery Air had agreed to pay $50 million in cash and 65 million class A common shares, or about $117 million worth of stock at the current market price, as well as an option to buy two million Discovery Class A shares at $2 each over 10 years.

No changes were planned at VIH, which operates five separate divisions, including a major helo repair centre, fuelling station and terminal at Victoria International Airport. The company, which had revenues of more than $125 million and earnings of $10 million last year, employs 280, about 100 of whom are based in Victoria. Norie would have remained CEO and become the largest shareholder of Discovery Air.

In an interview earlier this year, Norie viewed the merger as a "bigger pond to play in" and a way of gaining more access to capital to finance new machines and go after bigger contracts.

Norie said he has known the operators of Great Slave for years and there may be a silver lining to the crashed deal. He said there are hopes that the two companies can form a loose partnership involving aircraft, crews and various jobs.

Discovery president David Taylor, who is also president and CEO of Pacific & Western Credit Corp. (TSX: PWC), was not immediately available for comment.

Discovery Air shares were halted midway through yesterday's trading session, closing at $1.80, down five cents or 2.7 per cent.
© Times Colonist (Victoria) 2007