Atlas Air Worldwide Holdings Inc. in Purchase expects to close in the next few months on its acquisition of Southern Air Holdings Inc. in an approximately $110 million all-cash deal. The addition of Southern Air”™s domestic and international air cargo business is expected to add approximately $100 million to Atlas Air”™s annual revenues.
The aircraft outsourcing and aviation operating services company in Westchester on Tuesday announced the companies reached a definitive agreement for the acquisition, which must be approved by the U.S. Department of Transportation.
Headquartered in Florence, Kentucky, Southern Air Holdings is the parent company of Worldwide Air Logistics Group Inc. and its two operating subsidiaries, Southern Air Inc. and Florida West International Airways Inc. Officials in Kentucky said Southern Air will continue to operate there and Florida West will continue to operate in Miami as Atlas Air Worldwide subsidiaries.
Atlas Air Worldwide is the parent company of Atlas Air Inc. and Titan Aviation Holdings Inc. and the majority shareholder of Polar Air Cargo Worldwide Inc. Through its Atlas and Polar companies, Atlas Air operates the largest fleet of Boeing 747 freighter aircraft in the world. The pending acquisition will bring Atlas Air into the Boeing 777 and 737 aircraft operating business. Atlas Air officials said Southern Air flies 10 777 and 737 aircraft under flight agreements with DHL Express.
William J. Flynn, president and CEO of Atlas Air Worldwide, in the announcement called the pending deal “a strategically compelling, highly complementary and immediately accretive acquisition.” Â He said it will make Atlas Air “a more diversified and profitable company offering access to the widest range of modern, efficient aircraft, together with a broader mix of services and a greater scale and global footprint that will drive significant value for our customers and shareholders.”
Daniel J. McHugh, CEO of Southern Air Holdings, said with the acquisition his company “will now have a strong and viable parent to enable us to continue to grow.”
Earlier this month, Atlas Air agreed to a $100 million settlement in an antitrust class action lawsuit brought in federal court about nine years ago against more than two dozen air freight carriers, including Polar LLC and Atlas Air Worldwide Holdings. The Purchase company agreed to make annual installment payments over three years to settle claims. Atlas Air officials said the settlement is expected to be funded from available cash on hand.
Plaintiffs alleged that Polar and Atlas Air Worldwide with other air cargo carriers conspired to unlawfully fix prices of air freight shipping services worldwide, including on routes to and the from the U.S., from January 2000 through September 2006.
Atlas Air Worldwide officials said its companies continue to deny and did not admit any wrongdoing or liability when reaching the settlement.
Atlas Air officials said the full settlement amount would be recorded as a fourth-quarter expense for 2015 and should total approximately $2.60 per diluted stock share on an after-tax basis.
The settlement does not affect other related litigation or the company”™s ongoing business operations, according to Atlas Air.
Flynn in the company”™s settlement statement said Atlas Air Worldwide companies “are committed to the highest standards of ethics and governance. It is important to put this legacy matter behind us and focus our full attention on the continued execution of our strategic growth initiatives.”
Atlas Air Worldwide stock traded on NASDAQ rose from $34.40 per share at opening to $34.92 per share at closing on Jan. 19, when the acquisition deal was announced. In stepped-up trading activity on Jan. 20, Atlas Air stock closed at $36.21 per share.
