Soros-Backed Lessor Takes on GE With Helicopter Deal

November 4, 2014

Waypoint Leasing LLC, the helicopter lessor backed by billionaires George Soros and Michael Dell, agreed to buy 31 aircraft valued at more than $400 million to meet growing demand for the vehicles in offshore oil and gas exploration.

The acquisition almost doubles the size of Limerick, Ireland-based Waypoint and comes less than a month after General Electric Co. (GE) agreed to buy market leader Milestone Aviation Group LLC for $1.78 billion.

“There’s a lot of underlying demand for helicopters and that will continue,” Waypoint Chief Executive Officer Ed Washecka said in a phone interview. “The world is going to need more energy, and that’s true three years from now, 10 years from now, 20 years from now. When you look at where that energy is going to come from, a lot of it is going to come from offshore oil and gas development.”

Waypoint is acquiring a portfolio of 18 AgustaWestland AW139s, 11 Sikorsky S-92s and two Sikorsky S76C++ aircraft from First Reserve Corp., an energy-focused private-equity firm. The helicopters are under long-term lease agreements with CHC Group Ltd. (HELI), a commercial operator controlled by First Reserve.

The purchase, expected to close this quarter, will boost Waypoint’s fleet to 80 helicopters valued at more than $1 billion, making the company the “clear No. 2” in the industry behind Milestone, Washecka said.

Waypoint holds orders and options to acquire helicopters worth about $1 billion, at list prices, to be delivered through 2019. With this latest deal, the firm’s primary sponsors also agreed to provide another $75 million in funding, Waypoint said, bringing its total capital to about $1 billion.

New Demand

The lessor, run from Darien, Connecticut, was founded in May 2013 with $375 million in equity backing from funds affiliated with Dell’s MSD Capital LP, Soros Fund Management LLC and Cartesian Capital Group. Washecka said the leasing market is taking off as new helicopter models are increasingly in demand in burgeoning industries.

“Helicopter leasing has been around for a long time, there have been people that have been doing it for 30 years. As much as it was being done, it was almost a cottage industry,” Washecka said. Investors have been drawn to the market because “there weren’t a lot of people doing this. Ultimately, smart people with money are looking for opportunities.”

GE, already one of the world’s largest aircraft lessors, said earlier this year that it wanted to add helicopters to its portfolio of rental assets, in part because of their use in the oil and gas industry. The acquisition of Milestone, including 168 helicopters valued at $2.8 billion, came after GE’s six-month courtship with the four-year-old firm.

GE is acquiring the latest venture from Richard Santulli, a pioneer in fractional jet ownership who sold his NetJets luxury-leasing unit to Warren Buffett’s Berkshire Hathaway Inc. in 1998.

To contact the reporters on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net; Richard Clough in New York at rclough9@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net Molly Schuetz, Bruce Rule