Bristow Group Inc

Ticker
$VTOL
Industry
Energy
Type
MergerPost Reorg
Rating
Covered
Category
General
Target Price
$38.00
Latest Report
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This is a helicopter operator / lessor with Bristow and Era Group ($ERA) completed their merger on June 11, 2020. Bristow was in bankruptcy while Era had managed the oil & gas downturn fairly well.

Notes

Merger between ERA Group and Bristow took place in 1H2020 — targeting $240m pro-forma EBITDA
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Financials & Valuation

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Capitalization & Valuation (2Q22) — 27.9m shares outstanding x $27 = $753m market cap. Net debt is $256m for an EV of $1bn. On trailing EBITDA of $162m = 6.2x EBITDA multiple. Trailing FCF = $85m for a P/FCF multiple of 8.9x.

Resources

August 2022 (2Q22) — Good quarter, capex increasing

Revenue stopped declining and was flat YoY. EBITDA was up plenty to $51m in Q2 (from ~$36m last Q and $40m last year). Cash flow and net debt are in a healthy spot. Leverage is 1.7x this Q.

There were a few big announcements in the quarter. First, they won the GBP1.6bn UK SAR contract; second, they completed a GBP10m acquisition; third, they are spending $55m on a repair and maintenance contract which they expect will generate good returns. These announcements all mean more capex. The $55m will be spend in 2022 and the UK SAR contract will require $160m over the next 4 years.

The stock is down to $27 and has performed poorly the past few years. Current market cap is ~$750m with a $1bn enterprise value. This trades at 6.2x trailing EBITDA despite a relatively clean balance sheet, stable performance, a good management team, and discretionary cash flow.

If the new contract(s) and acquisition don’t lead to increased EBITDA/cash flow then there will be little room for capital deployment over the next few years.

At 8x $165m EBITDA = $1.32bn EV. They’ll likely finish the year with $260m (or more) in net debt as they use up operating cash flow for the R&M contract. on 28m shares that would be a $38 target price.

Bristow Group ($VTOL) — 2Q21 Update (8/7/21)
Bristow Group ($VTOL) — 2Q20 Update (6/16/20)