ATSG Completes Omni Air Acquisition

WILMINGTON, OH - November 9, 2018 - Air Transport Services Group, Inc. (NASDAQ:ATSG) today announced that it has completed the previously announced acquisition of Omni Air International LLC (Omni Air), a passenger ACMI and charter services provider, along with related entities, for $845 million, subject to customary adjustments.

Joe Hete, President and Chief Executive Officer of ATSG, said, "Completing this Omni acquisition is a milestone achievement for ATSG. It increases both our revenue and our Adjusted EBITDA expectations for 2019 by more than 40 percent, brings increased revenue diversification, and adds both passenger service and Boeing 777 capabilities to our range of services. We are eager to work with Omni’s management to pursue the many opportunities our combined assets and talented associates can address.”

In contemplation of the Omni purchase, ATSG today agreed to amend its senior credit facility with a consortium of banks led by SunTrust Bank, previously dated May 31, 2016. The new amended agreement has an aggregate principal amount of $1.28 billion, consisting of the continuing secured revolving credit facility of $545 million, a continuing secured term loan with a current balance of $60 million, and a new $675 million secured term loan. The maturity date of these loans is May 30, 2023.

The amended facility includes an accordion feature that would allow the total amount of borrowings under the facility to increase by up to $400 million, assuming certain conditions and with bank consent. The total amount of additional debt ATSG and its subsidiaries may incur outside of the amended facility increases from $300 million to $500 million. Credit terms are consistent with the existing facility, including with respect to provisions limiting ATSG’s ability to declare or pay dividends or repurchase shares, and requires ATSG to maintain specified financial ratios and minimum collateral values, and meet other financial condition tests. The facility is secured by substantially all of ATSG’s Boeing 777, 767 and 757 aircraft.

Omni Air is a leading provider of passenger airlift services to the U.S. Department of Defense (DoD) via the Civil Reserve Air Fleet (CRAF) program, and a worldwide provider of full-service passenger charter and ACMI services. Omni Air also carries passengers worldwide for a variety of private sector customers and government services firms. Omni Air, founded in 1993, is an FAR Part 121 certificated and IATA Operational Safety Audit registered airline. Omni Air’s fleet, which includes seven 767-300ER, three 767-200ER and three 777-200ER passenger aircraft, enhances ATSG’s position as the world’s largest source of dedicated 767 cargo aircraft to selected air-express and other operators. Eleven of the thirteen aircraft Omni Air operates are owned, with one 767-200ER and one 767-300ER leased. In total, the ATSG companies will have a combined fleet of more than 90 aircraft in service by year-end.

The combination with Omni Air is anticipated to add over $430 million in annualized revenues to ATSG. It also is expected to be immediately accretive to ATSG’s adjusted earnings per share in 2019. After adjusting for the present value of tax benefits, which are estimated to be approximately $85 million, the implied acquisition multiple is 5.8x Omni Air’s adjusted EBITDA for the trailing 12 months ending August 2018.