INDIANAPOLIS--(BUSINESS WIRE)--Oct. 1, 2013--
Republic Airways Holdings Inc. today announced that it has entered into
a definitive agreement to sell Frontier Airlines to an affiliate of
Indigo Partners LLC in an all-cash transaction.
Indigo Partners and its principals, led by managing partner William A.
Franke, have a history of investing in airline transportation and
related industries and creating successful, differentiated companies.
Under the terms of the stock purchase agreement, which has been approved
by Republic’s Board of Directors, the buyer, an affiliate of Indigo
Partners, will acquire all the outstanding shares of Frontier Airlines
Holdings, Inc. in a transaction valued at approximately $145 million, of
which $36 million (subject to certain adjustments under the purchase
agreement) is to be paid in cash for the equity of Frontier Holdings and
the balance is indebtedness that will be retained by Frontier. In
addition, Indigo plans to invest additional funds directly in Frontier
after the closing.
As part of the transaction, under a separate agreement, Republic will
assign to Frontier all of Republic’s rights under agreements relating to
the Republic’s Airbus A320neo order in exchange for reimbursement of
pre-delivery deposits, which total $32 million.
“This transaction is a direct result of Frontier’s successful
restructuring, continued cost reduction efforts and laser focus on
revenue generation,” said Republic Airways Chairman, President and Chief
Executive Officer Bryan Bedford. “I am confident that Frontier will
enjoy future growth as Indigo continues the process to position the
airline as a leading ultra-low-cost carrier in the United States.
“I want to thank all Frontier employees for their hard work in returning
their company to profitability and to the many team members who brought
this deal to a successful conclusion.
"We continue to be excited about the growth of our fixed-fee operations.
Our airline partner brands, including American Eagle, Delta Connection,
United Express and US Airways Express, have a bright future at Republic
Airways," Bedford concluded.
“We endorse and will support continued efforts to build Frontier into a
leading nationwide ultra-low cost carrier (ULCC),” said Franke. “As
airline fares continue to move up, passengers need affordable travel
alternatives. Our goal will be to meet that need in more markets as we
invest in the airline to grow its footprint, while maintaining a
commitment to quality service, customer choice and satisfaction and
continued employment opportunities for the Frontier team.”
Completion of the transaction is conditioned on agreements being reached
with the Association of Flight Attendants (AFA) and FAPAInvest LLC by no
later than Oct. 31, 2013, as well as agreement and documentation of
other third-party commercial agreements. The transaction is also subject
to receipt of required approvals by the Federal Communications
Commission for the transfer of Frontier’s radio licenses, the receipt of
certain third-party consents and releases and other customary closing
Franke added, “We are appreciative of the support provided by key
third-party constituents in the development of this transaction and are
hopeful that FAPAInvest LLC and the AFA will provide the support that is
critical to closing.”
Assuming satisfaction of the conditions of the agreement, Republic
expects the transaction to close in December 2013.
Barclays is serving as financial advisor and Hughes Hubbard & Reed LLP
is serving as legal advisor to Republic in connection with the
transaction. Latham & Watkins LLP is serving as Indigo Partners LLC’s
About Republic Airways Holdings
Republic Airways Holdings, based in Indianapolis, Indiana, is an airline
holding company that owns Chautauqua Airlines, Frontier Airlines,
Republic Airlines and Shuttle America, collectively “the airlines.” The
airlines operate a combined fleet of more than 285 aircraft and offer
scheduled passenger service on over 1,600 flights daily to 145 cities in
the U.S. as well as to the Bahamas, Canada, Costa Rica, Dominican
Republic, Jamaica, Mexico and Turks and Caicos Islands under branded
operations at Frontier, and through fixed-fee flights operated under
airline partner brands, including American Eagle, Delta Connection,
United Express and US Airways Express. The airlines currently employ
approximately 10,000 aviation professionals. For more information on
Republic Airways, please visit our website at www.rjet.com.
About Frontier Airlines
Frontier Airlines is currently in its 20th year of operations
and offers service to more than 75 destinations in the United States,
Mexico, Costa Rica, Jamaica and the Dominican Republic. The airline
employs more than 3,900 aviation professionals, operating from its hub
at Denver International Airport. For in-depth information on Frontier
Airlines and to book tickets, visit www.FlyFrontier.com.
About Indigo Partners LLC
Indigo Partners is a private equity firm established by W. A. Franke in
2003 to pursue acquisitions and strategic investments in the air
transportation and related industries. The firm was a significant
investor in Tiger Airways based in Singapore and Spirit Airlines based
in Ft. Lauderdale, Florida, and maintains lead investments in Wizz Air
Holdings, Plc, a ULCC with multiple bases in Central and Eastern Europeand Volaris Airlines, a ULCC based in Mexico City. Indigo Partners is
headquartered in Phoenix, Arizona.
Please note that the information contained in this release contains
forward looking information as defined by the U.S. Securities laws.
Forward-looking information is subject to risks and uncertainties and we
refer you to a summary of risk factors contained in our most recent
filing with the Securities and Exchange Commission.
Source: Republic Airways Holdings Inc.
Republic Airways Holdings
Peter Kowalchuk, 317-246-2470