Gama Aviation Share Price (GMAA)

Well, I guess that's it I'm taking the 95 offer and moving on. Can't complain made a few quid. I wish the company well wherever they go. Would have liked to be part of the next stage but a bird in the hand......

There's some really interesting coverage of the latest Air Ambulance acquisition here - and the closing comments imply more acquisitions are in view:

Https://www.helicopterinvestor.com/news/101054/hi-uplift-gama-aviations-last-minute-rescue-of-specialist-aviation-services/

Extracts:

"It was a race against time. Gama Aviation had more than 60 separate transaction documents to finalise with a host of stakeholders in just a few hours. All part of its bid to acquire UK air ambulance provider Specialist Aviation Services before the business would be forced to cease operations.

At risk were life-saving air ambulance services over London and the southeast of England. Without a last-minute deal, the emergency medical service (EMS) ambulance helicopters could have been grounded for weeks if not months"

"The acquisition is designed to accelerate the growth of Gama’s Special Mission strategic business unit (SBU) and complements other recent contract wins, including the Welsh Air Ambulance contract. Gama also recently opened new international operations in the Middle East to augment its fixed-wing aircraft management and MRO services in the region."

"“Long-term contracts that give you regular income and regular cash flow for a long time is very welcome,” he said. “Obviously, that’s provided by government work and special missions work as opposed to the ad hoc nature of the rest of business aviation.”

"Netted about $100m

So, what next for Gama Aviation? The company is always open to promising business opportunities, according to Khalek. And, after the sale last autumn of its US MRO business Jet East, it has the means to invest. Gama acquired the business for about $12m and injected up to $20m of debt. It sold the business for $131m and, after costs, netted about $100m.

While non-compete clauses limit Gama’s short-term acquisition strategy in the US, the company remains hungry for new opportunities. “Debt markets are pretty horrible at the moment and pricing is not very nice,” Khalek told our CJI London conference. “So, we’ve taken the opportunity to use our funding to influence budgets more and look to other financing down the line.”

It remains to be seen what, where and when Gama Aviation will be tempted to make its next acquisition."

You might think the board are being over cautious with our money given one can sell in the mrkt around current price.

On further consideration I see little point in tendering all or part of my shares at 95p as long as the shares stay around 80-100 level. I'm sure the board were cognisant of this pricing the offer as they have.

I'd rather stay and see how the SBU operational synergies plays out in 2024/5 on an expanded aircraft base. I think there's a very good chance the SBU will be the main driver of future revenues for GMMA as the company expect the division to break even in H1'24. I'd be willing to bet the use of helicopter ambulances emergency or otherwise will only increase in the years ahead.

As I haven't any desperate need for funds I may as well stay here than risk my money elsewhere on a chance I pick the right stock. Given my record of stock picks that's not a given by any means!

I expect the board to stand at their posts ready to accept returns at 95p, a small premium to the current bid price. You could be scaled back so best offer your full holding if your minded to fold as round 2 might be adjusted downwards if the economics of the business change.

No mention what the board intend to do. I'd expect them to retain their % and possibly add. Will returned shares go into treasury or be cancelled? As of now I'm minded to sell but will await the tender offer.

Evening all.

Https://www.thetimes.co.uk/article/air-ambulances-can-keep-flying-after-last-minute-rescue-deal-d0vr7njlz

"Gama Aviation agrees to buy Specialist Aviation Services hours before it would have ceased trading

A last-minute rescue deal has been struck to prevent the grounding of most of the air ambulances in the south of England.

Specialist Aviation Services, which provides helicopters and pilots to air ambulance charities in and around London, would have ceased trading on Thursday had its administrators not been able to find a buyer.

Gama Aviation, which has contracts with other air ambulance charities, agreed to acquire the business via a pre-pack sale. It paid £280,000, but anticipates that its total outlay, including a cash injection to keep the business running and the costs of the transaction, will amount to nearer £3 million.

Had Specialist gone bust, the six helicopters used by air ambulances serving Kent, Surrey, West and East Sussex, Dorset, Somerset, Essex, Hertfordshire and Cambridgeshire would have been grounded. Last year, the six helicopters were involved in more than 5,000 incidents.

Specialist Aviation Services is based at Gloucestershire airport, outside Cheltenham, and had been owned by a Dutch family office. FRP, which was brought in last October to find a buyer, said that the group had been suffering losses “for a number of years”, mainly because of unprofitable contracts that it had agreed.

In an attempt to shore up its finances, Specialist decided to move away from owning its helicopters and instead leased them back. It also set up a maintenance business.

Jonathan Dunn, the other FRP partner appointed as joint administrator, said that the changes had helped but were not enough to get the company into profit. “They were going to have a cash hard-stop,” Dunn said. “We needed to get a sale done before we hit that point.”

Under the deal, Gama will acquire Specialist’s contracts, as well as its six Leonardo AW169 aircraft and all but a couple of its 184 employees. The Civil Aviation Authority has assigned all of Specialist’s regulatory approvals to Gama.

“Our sector, because of the cost base and the regulatory environment and everything else, it’s really hard to do it without scale, and scale needs investment,” Marwan Khalek, 63, Gama’s chief executive, said. “My observation would be that [Specialist] was caught in that no man’s land of not having enough scale and also not having access to investment to scale up.”

Gama, which also charters private jets, intends to fold Specialist into its “special mission” business, which includes air ambulances and medical repatriation flights. That division is expected to turn over about £50 million in the present financial year. The most recent results for Specialist, for 2022, show that it generated revenue of £24.3 million.

“[Specialist] is being bolted on to a scaled business already, so we’re immediately in a bett