Shares of Air Transport Services Group (ATSG) surged in trading after it was announced that the air cargo transportation company would be acquired by Stonepeak in an all-cash deal for $3.1 billion. This deal is expected to close in the first half of next year.
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Details of Stonepeak’s Acquisition of ATSG
According to the terms of the deal, Stonepeak will acquire ATSG’s common stock for $22.50 per share in cash. The purchase price represents a premium of around 29.3% over ATSG’s closing share price on November 1, the last full trading day before this announcement. Furthermore, following the close of this deal, ATSG’s shares will no longer trade on NASDAQ, and it will become a private company.
James Wyper, Senior MD and Head of Transportation & Logistics at Stonepeak, commented, “ATSG plays a fundamental role in enabling the growth of e-commerce globally in a world that continues to shift away from brick-and-mortar shopping.” Notably, ATSG operates freighter aircraft for Amazon’s (AMZN) air cargo network.
Additionally, this deal includes a “go-shop” period in the agreement. A “go-shop” period in an acquisition refers to a specific window of time during which the company being acquired is allowed to actively seek out and solicit competing acquisition offers from other potential buyers. During this period, ATSG may seek proposals from third parties for 35 days, continuing through December 8, and in certain cases for 50 days, continuing through December 23.
What Is the Price Target for ATSG?
Analysts remain bullish about ATSG stock, with a Strong Buy consensus rating based on three Buys and one Hold. Over the past year, ATSG has declined by more than 10%, and the average ATSG price target of $22 implies an upside potential of 26.4% from current levels.
